Markets continued to trade flat as investors remained on the sidelines ahead of election results on Friday. IT and Realty shares were leading the gains, while oil & gas shares weighed. The S&P CNX Nifty was down 6 points, at 5535 and the Sensex was down 26 points, at 18,490.
------------------------------ Updated 09:30 hrs
Markets opened marginally lower shrugging off positive global cues as concerns over rising interest rates and election results continue to push investors to the sidelines. The S&P CNX Nifty was down 1 point, at 5541 and the Sensex was down 2 points, at 18,512.
Markets may continue to trade in tight range today due to lack of directional cues. Edelweiss in the morning note said, “daily momentum oscillator readings favour a short to medium-term bearish scenario. Volumes in the past couple of months have been on the decline, thus a strong directional move in either direction does not seem forthcoming. By and large, Nifty is likely to be range bound between 5650-5500 in the short-term.”
The election results in the state of West Bengal, Kerala, Taminal Nadu, Puducherry and Assam on Friday may set the tone for the market as it will determine the strength of the ruling party Congress and its allies.
Analysts say that Foreign Institutional Investors are not investing long term money in India because Indian markets are the most expensive among emerging markets. Sensex is trading at 15.5x one year forward P/E (Price to Earnings ratio) which is higher than Asian peers which are trading between 10-12x 1 year forward P/E. The FII activity in the cash market has been lacklustre for the past few sessions; they were net buyers of Rs 25 crore in the cash market, while DIIs were net buyers of Rs 139 crore on Tuesday.
Asian markets were trading mostly higher on expectations that Chinese inflation data may show some moderation and Japanese shares posting gains after better than expected results.
Japan's Nikkei Stock Average was up 0.5% led by technology shares after Microsoft announced to buy Internet phone service provider Skype for $8.5 billion and upbeat results posted by internet service provider NEC Corporation.
Hang Seng and Shanghai Composite were trading marginally lower, down 0.5% and 0.2% after opening higher this morning. South Korea's Kospi Composite and Strait Times gained 0.4% each and Taiwan's weighted index was up 0.2%.
Back in India IT shares were leading the gains; the BSE IT index was up 1%. Oracle Finance zoomed 7.3%, TCS gained 1% and Tech Mahindra advanced 0.8%.
From Oil & Gas space Oil Marketing Companies were leading the losses after Empowered Group of Ministers (EGOM) meet over fuel price hike was postponed by a week. HPCL, BPCL and Indian Oil Corporation were all down over 1% dragging the BSE Oil & gas index down by 0.8%.
Among individual stocks State Bank of India, country’s largest bank was down 0.1% after it raised deposit and lending rates by 75 bps, steeper than any other bank. SKS Microfinance rallied for the second consecutive day, up 4% after Vikram Akula, executive chairman in a press conference yesterday said conditions would improve as the industry consolidates and SKS rolls out new products.
Top gainers on the Sensex were Hero Honda, up 1.9%, Reliance Communication advanced 1.6% and DLF surged 1.5%. Top losers were NTPC, off 1.1%, ONGC slipped 1% and ITC was off 0.5%.
The midcap and smallcap shares were marginally up, 0.4% each. Market breadth was positive, 1011 stocks advanced for 630 stocks which declined.