IMD dampens market mood, FOMC awaited

The Meteorological Department has a played a dampener for the markets, which are trading flat. Markets have recovered a bit and move into the green. The weather department said that rainfall may be 95% of long-period average. And this forecast can firm up inflation further and leading to more tightening from the Reserve Bank of India.

The Sensex has gained close to 30 points at 17,589 and the Nifty is up 13 points at 5,289.

Asian markets are also positive, barring China’s Shanghai, which is down marginally. Japan’s Nikkei is up 2%, Hong Kong’s Hang Seng, Singapore Straits Times, Korea’s Kospi and Taiwan are up marginally. This is mainly on the Greek government winning the vote of confidence and Greece can now get additional financial support boosting investor sentiment.

Global markets also await the outcome of Federal Reserve Open Market Committee (FOMC) meet. Given rising inflation, US government is not expected to expand its balance sheet. However, the Federal Reserve may maintain an accomodative monetary policy on the back of weakness in the economy.

Market breadth has improved, but is still negative. 1,269 stocks have declined on the Sensex and 1,096 have advanced. Broader markets are in the red with CNX Midcap Index down 20 points and BSE Small Cap Index down five points.

Jindal Steel, Tata Motors, Reliance Infra, Maruti, Bharti Airtel, RIL, JP Associates continue to be the big losers on Sensex, each down over 1%. Tata Motors is down nearly 1% after Calcutta High Court refused to hear the ex-parte petition. Nifty losers are TCS, HCL Tech, SAIL, Dr Reddy’s, Ranbaxy, all down over 1%.

Consumer Durables and Realty indices are the top sectoral laggards, down 2 and 1%, respectively. Titan Industries is the top consumer durables loser, down over 4% after the stock was downgraded by CLSA. Gitanjali Gems is down 3%.

Capital goods index (up 0.5%) is the biggest gainer with Crompton Greaves, Havells and Praj leading he pack, each up 1%. However, BGR Energy is the top loser, down almost 2.5% at Rs 442.50.