Markets continue subdued trades

Cipla gains while rate sensitives decline

Markets continued to trade on a subdued note in late morning deals with selling pressure visible in IT shares. The BSE Sensex was up 14 points at 17,251. Nifty is up four points at 5,233.

Asian markets were mostly in red with Nikkei shedding 1% to 8,615 while Kospi and Taiwan dropped marginally. However, Shanghai Composite index jumped on stimulus hopes and reports of share buybacks.

India's exports fell 5.45 percent to $25.1 billion in June, while imports fell 13.46 percent to $35.4 billion, leaving a trade deficit of $10.3 billion, government data showed on Wednesday.

After recording strong growth for much of last year, India's overseas sales have tanked, with officials blaming weak demand in the United States and Europe for the fall.

Cipla added 4.4% to Rs 354. The company's Q1FY13 net profit was up at Rs 400.7 cr versus Rs 253 cr, YoY. Its net sales were up at Rs 1917.4 cr versus Rs 1591 cr, YoY. BHEL, Tata Power and Gail added around 1.5%.

Meanwhile, Coal India slipped 2.8% to Rs 349 on reports that the board of the State-owned company has decided to revise the contentious penalty clause in the fuel supply agreements (FSAs) to be signed with the power firms. CIL has also agreed to supply at least 80% of the required fuel to power firms.

Rate sensitive stocks continued to remain under pressure after Tuesday's monetary policy review by the RBI. HDFC Bank and Hero MotoCorp slipped 1% each, followed by Infosys and TCS.

Bharti Airtel dipped 0.8% at Rs 298 on reports that the company is exploring issuing new shares to raise funds, including external commercial borrowings.

"Bharti is a counter where we have seen shorts buliding pushing the price below 300 forcing traders holding longs to unwind their positions. This coupled with Call writers becoming active at 300 strike make us believe that this counter has very imited upside and become a perfect SELL/UNDERPERFORM candidate," said Shshank Mehta, Derivatives Strategist, Shah Investor's Home Ltd.

BSE market breadth is positive. Out of 2,354 shares traded,1,474 shares advanced while 775 shares declined in trades.