Dec 10, 2014: Start of Day Equity Commentary:: HDFC Securities

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Indian Markets

The 30-share Sensex ended down 322 points at 27,797 and the 50-share Nifty closed down 97 points at 8,341. In the broader market, BSE midcap and smallcap indices underperformed their larger peers with losses of around 1.5% each.  Market breadth in BSE ended negative with 903 declines against 2,040 advances.   NSE cash turnover was at Rs. 22808.

All the sectoral indices on BSE closed in red. BSE Power and Metal indices weighed the most with losses of 2.7% each followed by Capital Goods and Consumer Durables indices which lost more than 2% each.  BSE Oil and Gas index ended down by 1.5%. BSE IT and Healthcare indices down by 0.2% each posted the least losses among the sectors.  Sun Pharma gained around 1%. Mahindra and Mahindra ended with gains close to 1.5%. ICICI Bank lost over 1%. SBI, HDFC Bank & Axis Bank have already introduces ATM use charges.  Axis Bank and SBI ended down by 1.4% and 2.2% each. Tata Motors and Maruti Suzuki lost 2.4% and 1.5% each.

As per the provisional figures on Tuesday, FIIs were net sellers of Rs. 222 cr in the cash market, while they were net sellers of Rs. 255 cr in the F&O markets. DIIs were net sellers of Rs. 345 cr in the cash market. 

US and European Markets

The U.S. stock market staged a rebound on Tuesday but still ended the day lower, even after erasing steep opening losses sparked by China?s tightening of lending rules and Greece?s surprise elections announcement. The Dow Jones industrial average ended down 0.3% or 51.28 points to close at 17,801.20, the S&P 500 lost 0.50 point, or 0.02 percent, to 2,059.82 and the Nasdaq Composite gained 25.78 points, or 0.54 percent, to 4,766.47.

European markets slid Tuesday after an early presidential vote was called in Greece, which investors feared could jeopardize the struggling country's bailout program. The CAC 40 of France, DAX of Germany and FTSE 100 of UK ended lower by 2.55%, 2.21% and 2.19% respectively. 

Most of the Indian ADRs ended on negative note. Among the banking stocks, ICICI Bank was down 0.3% while HDFC Bank was up 0.5%. IT majors, Infosys was down 0.4% while Wipro was down 2.2%. Dr Reddys was up 0.5% while Tata Motors was down 3.8%

Latin American Markets

Among the Latin American markets, the Mexican markets were down by 1.4%, while the Brazilian index ended lower by 0.2%.

Asian Markets

Asian markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.94% while the Hang Seng is down 0.41%. The Nikkei 225 is not trading.

As of IST 8.20 am SGX Nifty is trading lower by 40 points

Currencies

The rupee closed weaker at 61.89 against the dollar as the country?s current account deficit (CAD) print for the second quarter showed a higher reading than in the previous quarter. India?s CAD ? a measure of the country?s external vulnerability ? rose to 2.1 per cent of GDP in the second quarter from 1.7 per cent in the first quarter.

The dollar tumbled against euro and basket of other major currencies following a surprise decision by the Greek government to bring forward a parliamentary vote for president to next week, a move which could trigger early elections if Prime Minister Antonis Samaras? candidate is not chosen. USD/EURO closed at 0.80

Commodities

Oil for Jan 2015 contract gained 1.22% at $63.82/barrel.

Gold for Feb 2015 delivery gained 3.10% at $1232.0/troy ounce.

Key Events for today

Japan - CGPI. BSI Large Manufacturing Conditions (Q4 )
India - M3 Money Supply
USD - API Weekly Crude Stock, MBA Mortgage Application, Crude oil Inventories, 10-Year Note Auction
Europe - French Non Farm Payrolls and Industrial production
 
Outlook

Indian markets could open negative and be volatile during the day. Immediate support for Nifty is at 8250 level, while immediate resistance is at 8390 level. Among the Sectoral indices, Pharma FMCG may relatively outperform while Banks, Capital Goods, Power may relatively underperform.