Stock specific action to continue amid negative bias

SBI, BHEL, ONGC, Hero MotoCorp are some of the companies that will announce their December quarter results today

Markets are likely to trade in a range today with a negative bias on the back of subdued global cues. Stock specific action is likely to continue given the ongoing results season. At 8am, the SGX Nifty was trading at 7,188 levels, down 0.8%, or 61 points.

On Wednesday, markets ended at their lowest level since May 2014 amid a sell-off in state owned banks after they reported huge losses because of higher provisioning on account of rising non-performing assets. The S&P BSE Sensex ended down 262 points at 23,759 and the Nifty50 closed 83 points lower at 7,216.

In the broader market, the BSE Midcap and Smallcap indices were down 1%-1.4% each. Market breadth remained weak with 1994 losers and 654 gainers on the BSE.

"The market is in the bears’ grip and has hit a fresh intraday 52-week low of 7,178 on Wednesday. The continuous surge in Yen and gold is keeping equity investors on the toes, while a surprise uptick in the European market has provided some intermediate deviation from the low. The road ahead looks jittery with the upcoming union budget and the deepening slowdown in the rest of the world," said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services in a note.

RESULTS TODAY

Aditya Birla Nuvo, Amtek Auto, Ashok Leyland, Bank Of India, BHEL, Coal India, Hero MotoCorp, Hindustan Motors, Indian Bank, Indraprastha Gas, Jubilant FoodWorks, Lanco Infratech, NALCO, NCC, ONGC, Oriental Bank Of Commerce, Punjab & Sind Bank, State Bank Of India (SBI), Tata Motors, Union Bank Of India, Unitech, Voltas and Wockhardt are some of the companies that are likely to announce their december quarter results today.

ASIAN MARKETS

Asian shares sputtered on Thursday as US Federal Reserve Chair Janet Yellen's tone of guarded optimism led to an indecisive finish for Wall Street and further weakness for the dollar.

While European banks found a moment of stability, a renewed rush to the safety of longer-term US Treasury debt suggested the flight from risk was far from over.

The euro zone's banking index ended Wednesday up 6.9%, but still appeared destined for a seventh straight weekly decline in the longest losing streak since 1998.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat in early trade, while Australia's main index eked out a 0.3% gain.

South Korea re-opened from holiday with a 2.5% drop as it caught up with losses elsewhere.

The absence of Japan for a holiday might actually help the mood as Tokyo has been the hardest hit market this week. The Nikkei sank 7.6% in just two sessions as a surging yen dimmed the outlook for exports and profits.

JANET YELLEN'S TESTIMONY

The Federal Reserve is unlikely to reverse its plan to raise interest rates further this year, but tighter credit markets, volatile financial markets, and uncertainty over Chinese economic growth have raised risks to the U.S. economy, Fed Chair Janet Yellen told U.S. lawmakers on Wednesday.

"I don't expect the (Federal Open Market Committee) is going to be soon in the situation where it is necessary to cut rates," Yellen said. "There is always a risk of a recession...and global financial developments could produce a slowing in the economy," she added.

Yellen said she expected continued US economic growth would allow the Fed to pursue its plan of "gradual" rate hikes, but her comments kept the central bank's options open.

"Janet Yellen’s testimony to Congress yesterday was not what the markets had wanted to hear. True, as we noted yesterday, she faced an almost impossible task to find the correct wording to express the right mixture of optimism and concern. The initial market response certainly seems to be that she fell short of expectations. Indeed, although the S&P closed little changed it gave back all the healthy gains it had made pre-Yellen. Indeed, overall it seems the Yellen is still for hiking, just not as aggressively as the ‘25bp a quarter’ December dot plot had suggested just six weeks ago," points out a note from Rabobank International. 

OIL PRICES

Oil prices slid on Thursday as record US crude inventories and worries about a global economic slowdown weighed on markets, and Goldman Sachs said prices would remain low and volatile until the second half of the year.

International benchmark Brent crude futures were trading at $60.62 per barrel at 0117 GMT, down 22 cents.

US West Texas Intermediate (WTI) crude futures were at $26.96 per barrel, down 49 cents and within a dollar of the $26.19 a barrel 2003 low from January.



With Reuters inputs