Markets have a choppy morning

The gains in the banking pack ahead of the Q4 numbers are being offseated by losses in RIL and the FMCG space.

The markets are choppy this morning as the gains in the banking pack ahead of the Q4 numbers are being offseated by losses in index heavyweight RIL and big names in the FMCG space. The Sensex is at 22859, lower by 17 points and the Nifty is at 6829, down 11 points. The broader markets are trading marginally in the green, the midcap index is at 7411, up 16 points and the smallcap index is up by an identical figure at at 7661. 

 

The benchmark indices had rallied to fresh all-time highs earlier this morning due to continued inflows on the FII front. But they have turned choppy thereafter, albeit within a range of around 100 points on the Sensex, as the market participants seek to establish the immediate direction at the beginning of the new May derivatives series.

 

 

The Asian markets are struggling this morning as the emerging crisis in Ukraine has soured the mood across the continent.  Hang Seng has dropped 0.7% and Straits Times is trading lower by 0.4%. However, Japan's Nikkei is up 0.7% and Shanghai Composite is trading virtually unchanged. The major US stock indices had ended flat on Thursday, with the Dow Jones ending down 4.3 points at 16,497.35 and the broader S&P 500 gaining three points at 1,878.61. However, the Nasdaq had ended up 21 points at 4,148.34, led by gains in Apple shares.

 

In economy-related news, the Indian Meteorological Department has forecasted below-average monsoons in much of South Asia, including India. This could weigh on the fragile economic recovery and lead to flaring-up of food inflation.

 

Index heavyweights such as RIL and the FMCG pack are exerting pressure on the indices. ITC has shed 1.3% at Rs 348 to top the loser's list on the BSE and Hindustan Unilever has lost 1.1% at Rs 589. And index bellweather has shed 1% at Rs 955. Auto stokcs are also witnessing selling pressure, with Bajaj Auto and Maruti Suzuki losing around half a per cent each at Rs 1984 and Rs 1973 respectively.

 

ACC has slipped by 2.7% at Rs 1311 post its Q4 numbers. ACC, India's second largest cement maker, had posted a decline of 8.7% in its net profit for the quarter ended March, 2014. The profitability fell to Rs 400 crore compared with Rs 438 crore in the previous corresponding quarter. The company's sales turnover was marginally up at Rs 2,967 crore against Rs 2,906 crore last year. Ditto with Ambuja Cements, which has shed 1.6% at Rs 215. Ambuja Cements, a part of Swiss cement giant Holcim, had recorded a net profit of Rs 520 crore for the quarter ended March, a rise of 6.6% compared with Rs 488 crore in the corresponding quarter last year. The company follows a January-December accounting year.

 

Cairn India has tumbled by 5.1% at Rs 334 on concerns of lower production and has shed 4.4% at Rs 336. Cairn India reported an 18% jump in consolidated profit after tax (PAT) to Rs 3035 crore on 16% growth in revenue to Rs 5049 crore in Q4 March 2014 over Q4 March 2013. However, the company gave flat production forecast for FY15.

 

Wockhardt is trading lower by 2% at Rs 647 on the NSE after the pharmaceutical company said the regulator in Himachal Pradesh has suspended the manufacture and sale of one of its products.

 

On the other hand, BHEL is continuing its recent uptrend to add another 1.9% at Rs 193. Banking names are doing well ahead of the Q4 numbers of ICICI Bank, Axis Bank and IDFC. HDFC has gained 1.4% at Rs 890, Axis Bank has added 0.9 at Rs 1531, SBI has added 1.4% at Rs 2095 and ICICI Bank has strengthened by 0.8% at Rs 1310.

 

PSU banks have gained on government's capital infusion plans. Oriental Bank, Indian Overseas, Allahabad Bank, Canara Bank, BOI, Syndicate Bank and Union Bank have rallied between 3% and 6% on the National Stock Exchange.

 

Strides Arcolab has rallied 5% to Rs 487 after the pharmaceutical company announced that its Oral Dosage Forms manufacturing site (KRS Gardens) in Bangalore was recently inspected by the United States Food and Drug Administration (US FDA) as part of GMP compliance audit and the facility continues to be approved.

 

The market breadth is positive. Out of 1920 stocks traded on the BSE, there are 971 advancing stocks as against 852 declines.