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Markets snap 8-day winning streak

Markets have come off day’s high with Nifty slipping below 8,900 owing to profit taking in the frontline stocks after sharp gains in the previous eight sessions.

Markets are likely to remain volatile in late trades ahead of the expiry of January F&O expiry tomorrow.

At 2.25 PM, the 30-share Sense is down 91 points at 29,481 and the 50-share Nifty has lost 20 points at 8,890.

Among broader markets, BSE Midcap index is flat with a negative bias whereas the Smallcap index is trading lower by 0.8%.

Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 954 crore on Tuesday, as per provisional stock exchange data.

Local Currency:

The rupee was trading lower at 61.39 to the US dollar compared to previous close of 61.41 on fresh dollar selling by exporters amid strong equity market.

Across the Globe:

The Fed’s first two-day policy meeting of the year concludes on Wednesday. The U.S. central bank is likely to signal it remains on track to begin raising interest rates later this year.

Japanese stocks rose to a fresh one-month high on Wednesday as expectations of strong corporate earnings and a weaker yen boosted investor sentiment.

The Nikkei benchmark gained 0.2% to close at 17,795.73, its highest since Dec. 29, after reversing early losses triggered by profit-taking after disappointing US earnings. The average rose 1.7% on Tuesday.

Market participants were also buying on expectations that Wall Street shares would recover Tuesday’s losses on Wednesday, as US stock futures rebounded during Asian hours.

Key Stocks:

On the sectoral front, BSE Consumer Durables index is leading with over 3% gains followed by Realty and IT indices up over 0.7% each. However, BSE Capital Goods index is the top loser down over 1.5% followed by Metal and Auto indices down nearly 1% each.

Telecom major Bharti Airtel has declined over 4.4%. Bharti Airtel has commissioned Nokia Networks to expand its 4G presence to six new circles. The deal marks India’s first FDD-LTE deployment on 1800 MHz that will witness the launch of super-fast mobile broadband in 6 circles.

Tata Motors is down nearly 3% on concerns of equity dilution after the company said it would seek shareholder approval to raise up to Rs 7,500 crore via rights issue of equity shares and DVR shares adding that the funds will be used for expansion and reduction of debt.

Capital goods shares like L&T and BHEL are witnessing profit taking after gains in the previous session. L&T and BHEL are down over 2%.

Tata Steel has lost nearly 2%. The company believes the raw material issues, which forced it to import iron ore for the first time last year, have been resolved. Among other stocks from the metal pack, Sesa Sterlite, Coal India and Hindalco are ytrading under pressure and are down between 1-1.6%.

Banking shares mainly private sector such as ICICI Bank, Axis Bank and HDFC Bank which touched their respective record high on the National Stock Exchange (NSE) during intra-day deal yesterday are trading lower today on account of profit taking ahnd are down between 0.2-1%.

On the flip side, the main gainers on the Sensex are HDFC, ICICI Bank, Maruti Suzuki, Coal India, Sun Pharma, SBI and TCS.

Shares in India’s largest mortgage-lender HDFC are up nearly 3% since housing demand in India is likely to get a boost from falling interest rates and lower inflation. 

State Bank of India (SBI) is trading higher by 1.1% at Rs 330, its highest level since November 2010 on BSE, after the country’s largest state-owned lender said that its committee of directors on capital has permitted it to raise up to Rs 15,000 crore in a share sale to support loan growth and meet capital adequacy requirements.

Shares of Maruti Suzuki India (MSIL) are trading higher by 2% at Rs 3,748, extending its previous day’s 2% gain on NSE, after broking firms reiterate “BUY” recommendation on the stock with a target price by up to Rs 4,300 per share.

State-run Oil and Natural Gas Corp’s share sale is scheduled for this fiscal though falling crude prices pose a challenge, Oil Minister Dharmendra Pradhan said on Wednesday. The stock is up 0.2%.

Shares of consumer goods companies have firmed up as low inflation levels has increased the buying power of consumers thereby resulting in higher spends.

The Tata Group firm’s net profit for the December quarter rose 15% to Rs 191 crore compared to the same quarter last fiscal driven by healthy revenue growth and margin expansion in the jewellery business.

Revenue from jewellery business grew 11% to Rs 2,347 crore during the quarter under review as against Rs 2,111 crore of the same period last fiscal. The stock was up over 7% at Rs 430 while PC Jewellers was up 2% and Thangamayil Jewellery was up 2.3%.

VIP Industries was up nearly 6% ahead of its third quarter earnings tomorrow on the back of heavy volumes. Over 300,000 shares were traded on the BSE against a two-week daily average volume of around 80,000 shares.

The IT stocks rebound in today’s trade on the back of a depreciating rupee. Infosys, Wipro and TCS are up between 0.5-0.8%.

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