Tuesday, global cues point to a weak opening of the Indian market. However, as the market undertone is bullish, losses if any could be limited. Additionally, the market may witness some buying interest following a sharp decline in the price of oil in New York trading on Monday. Meanwhile, investors may remain cautious ahead of the Federal Reserve's meeting on Tuesday.
Tracking global cues, the Indian market ended a choppy session lower on Monday.After trading in a range of 14,726 - 14,503, the BSE Sensex closed at 14,657, down 79 points or 0.54% over the previous day's close. The S&P CNX Nifty finished at 4,395, down 18 points or 0.41%. On the BSE, the mid-cap index (up 1.77%), the small-cap index (up 0.50%) and the broad-based BSE 500 index (up 0.50%) bucked the declining trend to close in positive territory. The Sensex futures closed at a premium of 31 points to the benchmark. The market breadth was positive, with 1844 stock advancing compared to 809 stocks that declined.
Overnight, US stocks closed lower following the release of a key economic report that showed an increase in the rate of inflation. Nevertheless, a sharp decline in the price of oil helped the markets pare some of their losses. The Nasdaq Composite index declined 1.10%, the Dow Jones Industrial Average closed down 0.37% and the S&P 500 index ended down 0.9%.
Meanwhile, Indian ADRs finished mixed. HDFC Bank closed up 0.11% and MTNL advanced 0.90%, while the others declined. Sterlite Industries (down 5.78%), Wipro (down 5.42%), ICICI Bank (down 3.45%), Reddys Laboratories (down 2.41%) and Infosys (down 2.15%) were among the major losers.
Currently, markets across the Asia-Pacific are trading mixed. China's Shanghai Composite index is up 0.07% and Japan's Nikkei is advancing 0.27%, while Hong Kong's Hang Seng index is trading down 1.83%.
Crude oil is currently trading at $120.29 a barrel, down 0.92%. Amid rising OPEC supplies for a third consecutive month in July and a declining demand for oil in U.S. & Europe, crude oil drifted to an intra-day low at $119.50 a barrel, in New York trading on Monday. However, after recouping some of its losses, crude oil closed at $121.41 a barrel, down $3.69.
Meanwhile, the rupee ended down 15 paise to close at 42.49/50 against the dollar on Monday following heavy demand for dollar from oil companies.
Metal companies may remain under pressure following weakness in metal prices on LME. Oil marketing companies could see some buying following a sharp decline in the price of oil in New York trading on Monday.
Sugar stocks and tea manufacturers may attract some buying on reports that indicate higher market prices for these commodities this year. IT stocks may remain under pressure after their ADRs declined sharply overnight.
Reliance Infra and Reliance Power may see some activity over reports that Reliance group is contemplating investments in nuclear sector. ORG Informatics may remain in focus after the company secured order worth Rs.78.06 crore. Gitanjali Gems may see some activity after its board of directors approved a proposal for consolidating the company's Indian businesses.
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