Rangebound markets trading flat

Markets are stuck in a narrow range in the noon deals and are trading on a flat note. The Sensex is up 38 points at 17,811 and the Nifty has advanced 16 points to 5,406 levels. The Sensex has traded in a range of 108 points so far.

According to Ranak Merchant, Technical Analyst- Strategies with Sushil Financial Services, "We expect markets to trade in range bound manner for a few more days and then break above the 5,450 levels. However considering the recent run up, all trading positions need to be watched with caution and partial profit booking is advised."

In Asia, Japan's Nikkei rose to end at its 200-day moving average after the Bank of Japan unexpectedly eased policy by increasing its asset-buying programme to help the economy mired in deflation and hurt by a strong yen. Nikkei advanced 0.6% to close at 9,052 levels. Other Asian markets like Hang Seng, Shanghai and Taiwan ended the day marginally lower.

Back home, headline inflation fell to an over two-year low of 6.55% in January on cheaper food items, which may prompt the Reserve Bank to cut policy rates in the coming months. Wholesale Price Index (WPI), stood at 7.47% in December 2011. It was 9.47% in January last year.

State bank of India is the top gainer among the Sensex stocks, up 3.2% to Rs 2,197 near its highest level since August 18, 2011, after the chairman of India’s largest lender, Pratip Chaudhuri said that “the worst is over" while announcing the third quarter yesterday.

Hindalco, Hero Honda, Mahindra & Mahindra, Tata Motors, Sterlite Industries, L&T, DLF, ICICI Bank and Maruti Suzuki are also among the gainers.

At the same time, Cipla is the top loser among the Sensex stocks, down 5.3% to Rs 324 on reporting weaker than expected third quarter numbers. Tata Power, ONGC, Bharti Airtel, Bajaj Auto, Jindal Steel, HDFC Bank, Wipro, Gail India, ITC, TCS and Tata Steel are also among the laggards.

Auto, realty and banking stocks are witnessing buying. The BSE Auto index has advanced over 1% or 111 points to 9,907 levels. realty index is has advanced 1% to 1,909 levels. Bankex is up nearly 1% or 100 points at 12,129 levels. Consumer dutrables, capital goods, PSU, metal and oil & gas stocks are also witnessing some bit of buying.

However, Healtrhcare, power and technology shares are under selling pressure. The BSE healthcare index has shed 0.4% to 6,343 levels.

Apollo Hospitals, Divis Lab, Biocon, Ranbaxy, Orchid Chemicals, and IPCA Labs are the top losers in the healthcare space.

The broader markets have outperformed the benchmark indices. The BSE mid-cap and small-cap indices have advanced over 0.6% each in trades thus far.

The overall breadth is positive as 1,438 stocks are advancing while 1,260 are declining.