Markets are expected to close flat on back of losses in banking shares. Sensex opened in the green at 20,038 and touched an high of 20,217-up 179 points, the index has pared most of the gains and is trading higher by 65 points at 20,027. and the S&P CNX Nifty has risen 13 points to 6006.
Asian markets ended on a mixed note. Japan's Nikkei Stock Average was off 0.1%, South Korea's Seoul Composite fell 0.2%. The Shanghai Composite index closed up 0.5% while the Hang Seng index in Hong Kong ended down 0.4%. European indices were also off to a weak start, CAC-40, FTSE and DAX are all trading marginally in the red. Disappointing U.S. nonfarm payrolls dampened across Asia and Europe.
Analysts say that there is some amount of decoupling between India and the rest of world backed by strong growth momentum, however their view remains cautious. Rajesh Jain, EVP & Head-Retail Research,Religare Securities said, "India has not been impacted due to its strong economic growth and domestically-funded fiscal deficit. The kind of GDP growth we are seeing, we are in better times. However, the Indian markets could be impacted indirectly as inflows could hurt if crisis further spreads."
Banking shares have been dragging the bourses down in the last leg of the trade, Bank of India has shed 4%. Canara Bank has dropped 3.5%, ICICI Bank is off 2.4% and Stata Bank of India has plunged 2.2%.
Metal stocks have been shinning in trade led by Tata Steel, up almost 4% on reports of Rio Tinto, a mining leader buying stake in
Riversdale for $3.2 billion. Tata Steel surged because it holds 21.2% stake in coking coal miner Riversdale. JSW Steel, up 4.7%, Sterlite, up 4.3% and Jindal Steel, up 3.4% were other gainers from the metal pack.
From the Auto, Hero Honda was down 2% after reports that Honda will exit its stake in joint venture and will seek approval for the break up from the board of directors this month. Another stock which was in the limelight was Suzlon, the stock has surged over 2% after its board approved a proposal to acquire the business of Suzlon towers and structures and the operations and maintenance unit of Suzlon Infrastructure Services.
Oil secretary said that ministerial panel may consider diesel price hike before share sale of IOC and ONGC giving fillip to the oil & gas index. Gail India was leading the gains, up 1.8%, Reliance Industries, up 1.7% and Cairn India, up 1.4% have been the prominent gainers.
Besides the metal stocks, Tata Motors, up over 3% and BHEL (up 1.4%) and NTPC (up 1.3%) have been the top gainers on the Sensex. Hero Honda, SBI, ICICI Bank, Reliance Communication (down 2.5%) and ITC (down 1.3%) have been the prominent losersa.
Broader markets have underperformed, the midcap index has fallen 0.3% and the smallcap index has dipped 0.7% versus the benchmark.