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The markets have started the week on a weak note due to the subdued cues from the global front.
At 9.40am, the Sensex was at 27,817, weaker by 139 points and the Nifty was at 8,417, down 39 points. The midcap and smallcap indices were also trading flat at 10,612 and 11,216 respectively.
The market breadth is positive. Out of 1447 stocks traded on the BSE, there are 727 advancing stocks as against 666 declines.
The markets had ended at 5-week closing highs on Friday. The Sensex had gained 633 points or 2.31% to settle at 27,957 and the Nifty had added 196 points or 2.37% to settle at 8,458 last week.
ON THE CHARTS
Technical chartists expect a possible immediate correction around 8300 – 8250 levels. The stop loss for this trade set up can be kept at 8570, which may negate the above-mentioned hypothesis, they say.
"The coming week may trade with enhanced volatility on account of May series derivative expiry on the NSE. Thus, traders are advised to trade with a proper exit strategy and avoid taking undue risks," points out a technical analyst with Angel Broking in a morning note.
Canara Bank, Central Bank of India, Transport corporation of India and Bombay Dyeing are likely to announce their results today. As per provisional figures, foreign institutional investors (FIIs)/ Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 211.42 crore on 22nd May 2015. Domestic institutional investors bought shares worth Rs 237.62 crore on that day.
TREND WATCH
The FMCG sector is having a weak session of trade, while the IT space has build on the gains witnessed in the previous week.
The FMCG index has shed about 1%, with ITC leading the fall. The FMCG major has dipped 3% to Rs 319 in early morning trade after reporting a lower-than-expected 3.7% year-on-year (y-o-y) growth in its net profit at Rs 2,361 crore for the fourth quarter ended March 2015 (Q4) due to muted growth in cigarette business and decline in agri segment. Radico Khaitan, Godrej Consumer Products and Nestle have also shed about 1% each.
The metal sector is also exhibiting weakness, with Vedanta and Tata Steel shedding about 2% each.
On the other hand, the IT space is having another good session due to the continuous weakening of the rupee. Wipro, Infosys and NIIT have edged higher by upto 1% each.
GLOBAL MARKETS
US markets closed in the red on Friday after hawkish remarks from Federal Reserve Chair Janet Yellen, who said the central bank will likely raise interest rates this year. The majority of the European markets ended Friday's session in negative territory due to investor concerns over Greece defaulting on its debt repayments.
The Asian shares have got off to a lacklustre start this morning, after rising inflation and a hawkish tone from the US Federal Reserve Chair rekindled expectations that the Fed is on track to hike interest rates.
The global trading activity is also likely to be thin in this session, as UK and US markets are shut on Monday for the Spring Bank Holiday and Memorial Day respectively. European centres such as Germany will be observing the Whit Monday holiday.
Japan's Nikkei stock index added 0.3%, getting a tailwind from a weaker yen and trade data released before market open showed a better-than-expected rise in April exports. Straits Times, Taiwan and Singapore indices are marginally high in early trades. The Shanghai market, however, is going strong to register gains of more thasn 2%.
