Markets trade in red after a flat opening

After witnessing a sharp rise in previous session, Indian equity benchmarks made a flat opening and are now trading with marginal losses in early deals on account of profit booking. Weakness in rupee to kept pressurizing sentiments. The rupee was trading lower by 12 paise at a fresh two-week low of 66.70 against the US dollar in early trade today, on increased demand for the American currency from importers.  Further, selling in metal stock too weighted down sentiments. Hindalco, Vedanta, Jindal Steel, NMDC, NALCO and SAIL were trading lower after the iron ore traffic, including pellets, at major ports saw a sharp fall of 28% in financial year 2015-16, as imports declined because of weak demand. Total iron ore cargo fell to 13 million tonnes (mt) from 18 mt a year ago.  However, down side remained capped on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 224.40 crore on May 9, 2016, as per provisional data released by the stock exchanges.

On the global front, US markets ended marginally higher on Monday, while Asian markets were trading mostly in green after China's consumer prices rose 2.3% in April from the same period last year slightly less than markets expectations.

Back home, on the BSE sectoral front, Auto witnessed the maximum loss in trade followed by Metal, Consumer Durables and PSU, while Realty, IT and FMCG remained the only gainers. The market breadth on BSE was positive in the ratio of 806: 671, while 74 scrips remained unchanged.

The BSE Sensex is currently trading at 25636.46, down by 52.40 points or 0.20% after trading in a range of 25636.46 and 25710.69. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.03%, while Small cap index was up by 0.21%.

The gaining sectoral indices on the BSE were Realty up by 0.35%, IT up by 0.06% and FMCG up by 0.05%, while Auto down by 0.98%, Metal down by 0.60%, Consumer Durables down by 0.45%, PSU down by 0.43% and Oil & Gas down by 0.37% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.67%, Hindustan Unilever up by 1.64%, Tata Steel up by 1.00%, Axis Bank up by 0.62% and Infosys up by 0.53%. On the flip side, Tata Motors down by 2.47%, Bajaj Auto down by 0.92%, Bharti Airtel down by 0.82%, ONGC down by 0.80% and NTPC down by 0.80% were the top losers.

Meanwhile, the Society of Indian Automobile Manufacturers (SIAM), the apex national body representing Indian Automobile Industry and other bodies including the government, has reported that the auto sector begun the new financial year on a positive note, as the industry produced a total 2,118,240 vehicles including passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle in April 2016, as against 1,909,842 in April 2015, registering a growth of 10.91 percent over the same month last year.

Sales too witnessed double digit growth and the sales of Passenger Vehicles grew by 11.04 percent in April 2016 over the same month last year. The overall Commercial Vehicles segment registered a growth of 17.36 percent in April 2016 as compared to the same month last year. Medium & Heavy Commercial Vehicles (M&HCVs) registered a growth at 21.98 percent and Light Commercial Vehicles grew by 14.01 percent during April 2016 over the same month last year. Three Wheelers sales grew by 36.68 percent in April 2016 over the same month last year. Passenger and Goods Carrier sales grew by 44.69 percent and 7.64 percent respectively in April 2016 over April 2015. Two Wheelers sales registered a growth at 21.23 percent during April 2016 over April 2015.

However, in April 2016, overall automobile exports declined by 15.87 percent. Though, Passenger Vehicles registered a growth of 6.61 percent, Commercial Vehicles, Three Wheelers and Two Wheelers declined by 2.68 percent, 61.86 percent and 10.80 percent respectively in April 2016 over April 2015.

Meanwhile, SIAM also warned that if the government ends up imposing a 30% environment cess on purchase of diesel cars and SUVs as per the recent Supreme Court order, investment in India's auto sector will dry up. It said, no one will invest in India and the country's image as an investment destination will be completely thrown out of gear. SIAM Director General Vishnu Mathur also said that most multinational companies whether they are Japanese, American or Korean, have invested in diesel technology in India, 'Everyone has got diesel portfolio and everyone is watching very closely how India decides to go ahead with its policy”. “If you have a policy and you do not abide by it that means that we are not a destination that can be trusted. Why should anybody invest here? Most investments from companies are frozen right now.”

The CNX Nifty is currently trading at 7853.40, down by 12.65 points or 0.16% after trading in a range of 7850.10 and 7874.00. There were 12 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 1.74%, Hindustan Unilever up by 1.45%, Tata Steel up by 1.31%, Axis Bank up by 0.81% and HDFC up by 0.67%. On the flip side, Tata Motors down by 2.47%, Hindalco down by 1.96%, Tata Motors - DVR down by 1.88%, Tata Power down by 1.29% and Bosch down by 1.18% were the top losers.

Asian markets were trading mostly in green, FTSE Bursa Malaysia KLCI increased 2.17 points or 0.13% to 1,634.36, Taiwan Weighted increased 5.03 points or 0.06% to 8,136.86, Shanghai Composite increased 5.47 points or 0.19% to 2,837.58, KOSPI Index increased 7.43 points or 0.38% to 1,975.24 and Nikkei 225 increased 243.89 points or 1.5% to 16,459.92

On the flip side, Hang Seng decreased 39.84 points or 0.2% to 20,116.97 and Jakarta Composite decreased 13.16 points or 0.28% to 4,736.16.