Markets turn choppy; pharma, oil shares weigh

Benchmark indices are swinging between the positive and negative territory as losses in healthcare, Oil and gas shares offset gains in the technology stocks.

BSE IT index is the only outperformer and is up over 1%. Cognizant's good quarterly results coupled with a depreciating rupee have provided relief to battered IT stocks.

At 10.50 AM, the Sensex is down 4 points at 26,713 while the Nifty has shed 14 points to quote at 8,083 mark.

Top gainers on the BSE include Bajaj Auto, TCS, Infosys, Bharti Airtel and Hero Motocorp. However,  Hindalco, Dr Reddy’s Lab, RIL, ICICI Bank and GAIL are losing sheen on the BSE and are down between 1.5-4%.
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  (updated at 10.50 AM)

Markets have erased early losses and surged further led by strong buying in information technology shares and auto shares.

At 10:10 AM, the 30-share Sensex was up 123 points at 26,840 while 50-share Nifty has gained 22 points to quote at 8,119 mark.

The top gainers on the Sensex are TCS, Infosys, Bajaj Auto, Coal India and Vedanta.


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Updated at 9:45

Benchmark indices have turned choppy in the morning trades after a weak opening tracking weakness among the Asian peers and losses in Wall Street after US Federal Reserve Chair Janet Yellen warned of high share valuations, adding to anxiety about future interest rates.

The US government will unveil US non-farm payrolls data for April 2015 tomorrow and this is likely to provide clues on the probability of a rate increase by the US Federal Reserve.

Persistent selling by foreign funds amid continued concerns over retrospective taxation, tax on subsidies and geo-political tensions in the Middle-East also dampened sentiment.

The rupee is quoting at 63.78, the lowest level in the year 2015 owing to losses in equities, with foreign investors pulling out of the markets.

At 9.45 AM, the 30-share Sensex is down 5 points at 26,713 while 50-share Nifty has shed 21 points to quote at 8,076 mark.

Foreign portfolio investors sold shares worth a net Rs 1699.60 crore yesterday, as per provisional data.On the other hand, domestic institutional investors purchased shares worth a net Rs 1454.97 crore yester

Meanwhile, the Lok Sabha yesterday, 6 May 2015, passed the Constitution Amendment Bill in respect of goods and services tax (GST). GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.

Among corporate earnings, Hero MotoCorp, Piramal Enterprises, United Bank of India, Titan, Sintex Industries and BASF India will announce their quarter ended 31 March 2015 earnings today.

Benchmark indices plunged by over 2% on Wednesday, with the Sensex breaking its crucial psychological level of 27,000 and the Nifty slipping below its crucial 200-DMA mark, amid a global bond rout.

GLOBAL MARKET

Asian stocks fell on Thursday, taking the lead from losses on Wall Street, while a rise in euro zone debt yields amid a global bond rout kept the euro hovering at a two-month peak versus the dollar.

As European deflation fears have ebbed, a seeming reversal of trades linked to the European Central Bank's big quantitative easing has resulted in a sell-off in core European bonds and equities this week, rattling investors across asset classes.

The Shanghai Composite Index SSEC was down 1.8%, extending its losses so far this week to 6.4%. The index is up an impressive 28 percent so far this year on views that Chinese policy easing would shore up equities. The steep gains, however, have triggered expectations of a sharp correction.

Tokyo's Nikkei lost 1.1% on its first trading day of the week. The Japanese financial markets were closed from Monday to Wednesday for public holidays.

The U.S. stocks ended weaker on Wednesday after U.S. Federal Reserve Chair Janet Yellen warned of high share valuations, adding to anxiety about future interest rates.

KEY STOCKS

On the sectoral front, all sectoral indices are trading in the negative territory with BSE Capital Goods, Consumer Durables, Healthcare and Bankex leading the decline and are down over 1% each.

The spike in crude oil prices has brought cheer to exploration and production companies, even as refiners turn cautious.

State-run ONGC plans to spend about Rs 14,000 crore on exploration this fiscal and is seeking partnerships to develop its deepwater assets at a time when low oil prices have made technology and talent cheaper, its new exploration chief said.  The stock is up nearly 1%. However, RIL and GAIL are down up to 0.5%.

Banking heavyweights such as ICICI Bank, Yes Bank, Axis Bank, HDFC Bank and SBI have dropped between 0.3-2%.

The technology pack is trading in the positive territory on the back of a depreciating rupee. TCS and Infosys are trading higher up to 1%.

Shares of Hero Motocorp are trading higher by 0.8% ahead of the quarterly results due later during the day.

Bharti Airtel continues its yesterday’s rally after MSCI raised the weightage of the company.

In an intriguing move, likely to be the first for an Indian business group, the promoters of pharmaceutical firm Cipla  had approached market regulator Sebi about four months ago seeking an "informal guidance" on a proposed family arrangement.  The stock is down 1.5%.

Other notable losers on the Sensex are Dr Reddy’s Lab, Hindalco, Wipro, Sun Pharma, L&T down up to 1.5%.

In the broader market, BSE Midacp and Smallcap indices are trading lower between 0.5-1%.

Market breadth is weak on the BSE with 993 loser versus 539 gainers.