Markets continue to trade flat; RIL down 3%

Markets continued to trade flat as gains in IT shares were offset by losses in oil shares

Markets continued to trade flat in noon trades as gains in IT shares were offset by losses in oil shares.

At 12:30PM, the 30-share Sensex was down 6 points at 24,357 and the 50-share Nifty was up 4 points at 7,267.

In the Sensex pack, IT shares firmed after the rupee weakened against the US dollar. TCS, Wipro and Infosys were up 1.5-2% each. HDFC and HDFC Bank were among other gainers.

Oil shares Reliance Industries and ONGC which had gained sharply in the previous few sessions witnessed profit taking and were down 3% each.
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(Updated at 10:55AM)
The markets have surrendered the modest gains seen this morning in what has been a choppy session of trade thus far. The Sensex is quoting at 24,371, higher by eight points and the Nifty is at 7,267, up three points. There is a lot of action in the broader market space for the second day in a row. The midcap index is at 8,191, higher by 100 points and the smallcap index is at 8,468, up 124 points.

 

 

The choppy movements witnessed this morning, which has seen the Sensex gyrate between an intra-day high of 24587 and a low of 24299 is probably portend of things to come in the immediate future. The markets tend to experience choppy, two-way movements in wake of a breakout/break-down as the bulls and bears seek to re-affirm their stamp of superiority over the market proceedings. 

 

There is a lot of action in the broader market space for the second consecutive session. The S&P BSE Realty index, a gauge for real estate companies, is the largest gainer among sectoral indices and has rallied 5.1%.

 

Real estate and infrastructure companies have rallied by up to 20% on expectations of change in policy environment. Unity Infrasprojects, Lanco Infratech, IL&FS Engineering and Constructions, Unitech, Oberoi Realty, Housing Development and Infrastructure (HDIL), Ansal Properties, Man Infraconstructions and Kolte Patil Developers have rallied more than 10% each on the Bombay Stock Exchange (BSE).

 

On the global front, all eyes will be on central bank action as the Bank of Japan will kick off its two-day policy meeting later in the day and the Reserve Bank of Australia is due to release the minutes from its latest meeting. 
 

Metal stocks are shining this morning. Tata Steel has added 1.8% at Rs 465 to top the gainers list on the BSE; it is just short of the 52-week high of Rs 484 touched on May 16. Sesa Sterlite  has gained 3% at Rs 234 and Hindalco has added 2.3% at Rs 155.  

 

The information technology stocks are seeing buying interest post the battering received in the previous session. Wipro has jumped by 1.8% at Rs 492 after the company announced, after market hours on Monday, a strategic partnership with Takeda Pharmaceutical Company, the largest pharmaceutical company in Japan and one of the global leaders of the industry. Infosys has added 1.3% at Rs 3063 and TCS has added 1.1% at Rs 2058.

 

On the other hand, the outperformers of Monday's session are seeing some profit-booking at higher levels. Coal India has slid by 4.3% at Rs 372 to top the loser's list on the BSE. ONGC has shed 3.2% at Rs 402 and L&T has lost 0.7% at Rs 1513. Index bellweather RIL has lost 1.8% at Rs 1099. The banking stocks, including ICICI Bank and SBI have edged lower by upto half a percent each.

 

Cipla has edged lower by 0.3% at Rs 384 after UBS downgraded Cipla to 'sell' from 'buy' as its original expectation of earnings accretion through Medpro acquisition has not played out while SG&A ramp up has been much stronger than we anticipated.

 

Jubilant FoodWorks is trading lower by 1.6% at Rs 1,171 after reporting a 23.7% year on year decline in net profit at Rs 24.95 crore for the fourth quarter ended March 31 2014 (Q4FY14), due to higher raw material and employee cost. 

The market breadth is strong. Out of 2,204 stocks traded on the BSE, there are 1,629 advancing stocks as against 499 declines.