Markets weak ahead of IIP data; BSE Metal index dips 3%

Benchmark indices are trading weak in the noon trades on caution ahead of the industrial production data due later during the day. Further, investors are seen booking profits at higher levels amid weak global cues. However, encouraging set of second quarter earnings from Infosys has helped offset some of the losses.

 

At 1.20 PM, the 30-share Sensex is down 140 points at 26,497 and the Nifty has dropped 43 points to trade at 7,917.

 

In the broader markets, the mid and smallcap indices have slipped between 0.3-0.6%, almost in line with the benchmark index.

 

Market breadth is weak with 1,648 losers and 998 gainers on the BSE.

 

Meanwhile, provisional data released by the stock exchanges after trading hours yesterday, 9 October 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 20.89 crore on that day.

 

The government will unveil industrial production data for August 2014 after market hours today, 10 October 2014. India's Index of industrial production (IIP) growth moderated to 0.5% in July 2014, from 3.9% (revised) increase recorded in the previous month of June 2014.

 

Global Markets:

 

Asian shares shuddered and Brent crude oil prices tumbled to their lowest since 2010 on Friday after weak German export data raised fears that Europe's economic woes could drag down the global economy.

 

Japan's Nikkei share average ended down 1.2 percent as the yen strengthened on safe-haven bids, and skidded 2.6 percent this week. Japanese markets are closed on Monday for a holiday.

 

Hong Kong's Hang Seng Index is down 1.8 percent, undermined by global growth fears as well as concern about a possible flare-up in pro-democracy protests there after students said they would maintain their campaign after the city government canceled talks.

 

Meanwhile, a bleak market day dawned in Europe, the UK's FTSE, Germany's DAX and France's CAC FCEc1 are trading down between 0.5-1 percent.

 

Rupee:

 

The rupee pared its early losses today, but was still down by 8 paise to 61.13 against the US currency, on sustained bouts of dollar demand from importers amid weak domestic equities and bullish greenback overseas.

 

Sectors & Stocks:

 

On the sectoral front, BSE Metal is the top losing index down 2.6% followed by FMCG, Auto, Capital goods and power indices losing between 0.5-2%. However, some buying is evident in Healthcare and IT indices up between 0.5-2%.

 

IT major Infosys is up nearly 7% after the country’s second largest IT firm in terms of market value posted profit of Rs 2,886 crore in June 2014 quarter. Total consolidated revenues, grew 4.5% to Rs 13,342 crore in the September quarter, as against Rs 12,770 crore in the June quarter. However, its peers TCS and Wipro are trading lower between 0.5-1%.

 

BHEL has continued to benefit after bagging Ennore supercritical power project. It is gaining over 2%.

 

In the auto space, Hero Motocorp is bucking the trend and has gained over 1.5% after the company launched two 100cc bikes priced at Rs 48,650 and Rs 51,550 each ahead of the festive season. Whereas, M&M, Tata Motors and Maruti Suzuki have dipped between 1-3%.

 

On the flip side, Cigarette maker and index heavyweight ITC has lost nearly 2.5% as Investors are not be betting on the stock on fears of weaker sales and profits from the cigarette division.

 

Financials shares which surged on the back of encouraging growth forecast from the World Bank in the previous session are trading with losses in today’s trade on account of profit booking. HDFC twins, ICICI Bank, Axis Bank and SBI have lost between 1-2.5%.

 

In the metal pack, Hindalco which was the top gainer, up 6% in yesterday’s trade, as global rival Alcoa Inc's earnings beat forecasts, propelled by higher aluminium prices is down nearly 4% on profit taking. Sesa Sterlite, Tata Steel and Coal India have lost over 1% each.

 

Drug maker Cipla has extended its previous day’s rally and is up 0.5% after the company said Medpro Pharma has entered into a tie up with Teva Pharmaceuticals affiliate to exclusively sell Teva products in South Africa. Meanwhile, Sun Pharma and Dr Reddy’s Lab are up over 1% each.