Markets remain weak; Index heavyweights drag

Markets are trading weak in a narrow range in the late morning trades on heavy selling by fund and retail investors in oil and gas and select financial stocks amid weak global cues.

 

Meanwhile, investors turned cautious ahead of the start of the two-day US Federal Reserve policy meeting starting today.

 

By 11:25, the Sensex has dipped 29 points at 26,787 mark and the Nifty has slipped by 13 points at 8,029 levels.

 

The broader markets continue to outperform the large counterparts- BSE Midcap and Smallcap indices have gained between 0.3-1%.

 

The market breadth on the BSE is healthy with 1,509 shares advancing and 1,068 shares declining.

 

Rupee:

 

Rupee is trading at 61.0425/0500 versus Monday's close of 61.13/14. Pares losses made on Monday, when the Indian unit saw its biggest daily fall in 1-1/2 months.

 

Global Markets:

 

Asian shares held near one-month lows on Tuesday as investors braced for a possible hawkish shift in the US Federal Reserve's policy stance as the Fed begins a two-day policy meeting later in the day. 

 

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed near one-month low hit on Monday after seven consecutive days of falls.

 

Japan's Nikkei stock average has shed 0.1%, catching up after Tokyo markets were closed for a local holiday on Monday and Singapore’s Straits Times index dropped 0.8%. However, China’s Shanghai is up 0.2% and Hong Kong’s Hang Seng is trading flat with a positive bias.

 

The Fed's Open Market Committee will begin its regular two-day policy meeting later on Tuesday, and investors will be scanning the outcome for clues on the timing of the first U.S. rate hike in more than eight years.

 

Speculation that the Fed could raise interests sooner and faster than previously expected have rattled many share markets around the global and supported the US dollar.

 

Sectors & Stocks:

 

On the sectoral front, BSE Oil & Gas index is the biggest loser down nearly 0.7% followed by Auto and Metal indices. Bankex is down 0.5%. However, BSE Realty index is leading the rally up over 1% followed by Healthcare, Consumer Durables and IT indices. BSE Capital Goods, FMCG, Power and Teck indices are trading marginally in the positive territory.

 

In the Oil and Gas space, ONGC and RIL have lost 1.7% and 0.5% each in the late morning trades.

 

Index heavyweight Tata Motors has dipped 1% after global wholesales in August 2014, including Jaguar Land Rover, stood at 73,524 units showing a declination of 10% from the corresponding month last year.

 

Metal shares continue to trade weak on weak Chinese economic data. China's factory output grew at the weakest pace in nearly six years in August raising fears the world's second-largest economy may be at risk of a sharp slowdown. Sesa Sterlite, Coal India and Tata Steel have lost between 0.3-1%.

 

In the financial segment, Axis Bank is up 1.8% and is the top gainer of this hour. ICICI Bank and HDFC twins are laso trading in the positive territory with marginal gains. RBI Governor Raghuram Rajan on Monday said that although the WPI has shrunk to a five-year low in August but there is no point in lowering interest rates to have inflation picking up again.

 

M&M, Hero Motocorp, Tata Power and NTPC are some of the notable names in red among others.

 

On the flip side, healthcare stocks are trading in the positive territory on renewed buying. Dr Reddy’s Lab and Sun Pharma have gained more than 1.5% each.

 

Shares of Wipro are trading nearly 1% higher after a subsidiary of India's third largest IT firm Wipro, secured a contract from Saudi-based Saudi Electricity Company (SEC) for implementing and performing plant maintenance and project system functionality of SAP ERP application.

 

Bharti Airtel, Bajaj Auto, BHEL and Hindalco are some of the notable names in green among others up between 0.5-2%.

 

Among other shares, Shares of Credit Analysis and Research (CARE) is trading higher by 3.5% at Rs 1,360 on the BSE after the company said its board has declared a special dividend of Rs 65 per equity share of Rs 10 each for the financial year 2014-15.

 

Mastek has surged nearly 9% to Rs 293, extending its previous day’s rally on National Stock Exchange, after the company on Monday announced the demerger of its insurance products and services business into a new company called Majesco.

 

Venus Remedies has tanked 12% to Rs 332 on back of heavy volumes on profit bookings. The stock opened at Rs 378 and touched a low of Rs 321 so far on National Stock Exchange (NSE).