Markets were trading flat after a soft opening following lacklustre global cues and lingering concerns of impact on India Inc., after larger-than-expected half-a-percentage point rate hike yesterday.
The Nifty was down 12 points, at 5,562 and the Sensex declined 33 points, at 18,481.
Earnings season for the June quarter has been a mixed bag, going forward analysts are concerned that the 50 basis point rate hike may erode margins and crimp corporate profits. Interest rate sensitive sectors such as banking, auto, infrastructure and real estate may feel the heat going forward. Markets may continue to remain jittery ahead of the futures and options expiry on Thursday.
Asian markets were trading mostly lower on Wednesday morning as US debt worries loomed. Japan’s Nikkei Stock Average was down 0.6%, Hong Kong’s Hang Seng Index was off 0.1% and China's Shanghai Composite index slipped 0.4%.
Back in India, HCL Technologies was trading flat at Rs 514 after consolidated net profit for the June quarter was reported at Rs 510 crore, up 9% and revenue was reported at Rs 4,300 crore, up 3.9% versus the previous quarter. Operating margins improved to 18.3% in June quarter against 17.3% reported in March.
From the oil & gas space, Cairn India advanced over 1% to Rs 327 after it reported a ten fold jump in quarterly profit yesterday on back of higher output. Net profit jumped to Rs 2,727 crore in the June quarter, from Rs 280 crore in the same period last year. Revenue surged more than four times, to Rs 3,717 crore.
In the primary market, L&T Finance IPO opened today, the issue is priced in the range of Rs 51 to 59 per share. The company has raised around Rs 160 crore from anchor investors and is expected to garner a total of Rs 1,575 crore from the public offering. Analysts recommend investors to subscribe to the issue as valuations are reasonable at 2x price to book multiple, at par with listed peers such as IDFC, REC and PFC.
Among the sectoral pack, BSE Consumer Durable Index was the top gainer, up1%. Gitanjali Gems gained 2%, Videocon Industries and Bajaj Electricals added over 1% each.
From the broader markets, the midcap and smallcap indices were trading higher by almost 0.5% each.
Top gainers on the Sensex were Reliance Communication, ONGC and Reliance Infrastructure, up between 0.6-2%. Prominent losers were BHEL and Hindalco, down over 1% each and State Bank of India slipped 0.7%.
Market breadth was positive, 1213 stocks advanced for 597 stocks which declined.
