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Benchmark indices are trading in red weighed down by Tata Motors and select IT shares. The markets, however, recovered some of their losses on the back of buying in financials and oil and gas shares.
At 12:45PM, the Sensex was trading 48 points lower or 0.17% down at 27,484 levels while the Nifty was trading below its crucial mark of 8,350 at 8,313, down by 27 points or 0.3%.
The broader markets are in sync with the larger peers and are trading in negative with BSE Midcap and Smallcap indices are down by 0.29% and 0.11%, respectively. The market breadth is also negative with 1,315 declines against 993 advances on the BSE.
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The markets are likely to remain volatile on the back of the derivatives expiry for the May series, which is due on Thursday.
Moreover, gross domestic product (GDP) data, which is due on May 29 and Reserve Bank of India’s (RBI’s) bi-monthly policy preview, which is due on June 2, has also cautioned the traders.
Rupee:
The Indian rupee has remained under pressure for the third straight session and is trading 5 paise down at 63.93 levels, after touching the 64 mark intra-day. The strengthening of the US dollar on the back of strong economic data has caused the depreciation in the rupee.
Besides, an increase in the demand for the greenback from importers and banks has also put pressure on the local currency.
Sectors and Stocks:
The markets are weighed down majorly by auto and IT stocks, both dropping nearly 2% each. However, banking and oil stocks have provided some relief by gaining more than 0.5% each.
Tata Motors has plummeted more than 5% after the company reported lower-than-expected consolidated net profit at Rs 1,717 crore for the fourth quarter ended March 31, 2015 (Q4) on account of lower-than-expected operating performance at Jaguar Land Rover (JLR) and mark-to-market (MTM) loss provisioning at JLR (on commodity hedges and revaluation of foreign currency debt).
Meanwhile, Tata Motors is set to get its annual dividend of 150 million pounds (Rs 1,500cr) from Jaguar Land Rover.
Other notable loser from the auto pack is M&M, which has shed 2.6% on the BSE.
From the IT sector, Tech Mahindra is the top loser on NSE. The stock of the fifth largest IT firm has tumbled more than12% on the NSE, after the company reported a nearly 500 basis points (bps) decline in EBITDA margins at 15.2% for the fourth quarter ended March 31, 2015 (Q4) against 20.2% in the December 2014 quarter.
Shares of Infosys and Wipro have shed between 1.5-2.5% each.
Gail (India) has dipped 1.2% ahead of its quarterly result, which is due today.
Other notable losers are Vedanta, Tata Steel and Hindalco, all shedding between 1-2% on the BSE.
On the gaining front, banking shares are trading positive after a Reuters poll claimed that the Reserve Bank of India (RBI) is likely to cut its benchmark interest rate by 25 basis points to 7.25% when it meets early next week.
Axis Bank, HDFC Bank, ICICI Bank, and State Bank of India have all gained between 0.5-1.5% each.
Bharat Heavy Electricals (BHEL), the country’s largest power equipment manufacturer, has posted a 52% drop in net profit during the fourth quarter ended March on slowdown in project execution. BHEL, however, has gained 1.57% on the BSE.
Shares of Bharti Airtel gained more than 1%. Tanzania's government has agreed a deal to buy back a 35% stake in a state-run telecoms company from the local subsidiary of Bharti Airtel for 14.6 billion shillings ($7.07 million), a senior official said.
Other gainers on the Sensex are Coal India, NTPC, ONGC and Dr. Reddy’s Lab, all have gained between 1-1.6% each.
