Nifty closes below 6100, Tata Motors slips on JLR margin concerns

Indian markets today closed in the red on Fed tapering concerns after better-than-expected US jobs data.

While the BSE Sensex ended163 points lower at 20502, the NSE Nifty ended 61 points lower at 6078.

BSE realty index ended down 3.1 percent - worst sectoral performer while BSE healthcare index rose 0.6 percent - top sectoral gainer.

Tata Motors ended 2 percent lower as analysts are cautious on the stock due to Jaguar Land Rover margin concerns. While JLR numbers were strong, its margins were higher only due to incentives received in UK.CLSA downgraded its rating from buy to outperform with a target of Rs 415. The brokerage says most of the JLR positives are in the price and excluding incentives, EBITDA margins did not improve quarter-on-quarter despite better product mix.

Nomura, too, downgrades the stock to neutral from buy. However, Credit Suisse maintains an outperform rating on the stock with a target of Rs 440. Barclays retains overweight rating on the stock (target Rs 431) while Citi maintains buy rating (target Rs 393).

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Shares in Cairn India gained after Brent oil futures rebound from a nearly four-month low, while the rupee hits nearly two-month low versus the U.S. dollar.

Rupee hits 7-week low but FM says currency will settle down soon

11:15 am Finance Minister P Chidambaram today again reiterated that the rupee will settle down after the Indian currency hit a seven-week low of 63.33 against the USD in morning trade.

Chidambaram said that some dollar demand from oil companies has come into the forex market, which has put further pressure on the rupee.

The rupee opened weak this morningdue to the dollar strength globally after an unexpected surge in US jobs data.

Rupee still weak at 63.25, Sensex seems to be correcting

10:15 am The rupee continued to trade weak at 62.35 against the US dollar on strong dollar demand from importers as well as the dollar’s strength against other overseas currencies on upbeat US jobs data.The rupee had depreciated by six paise to close at an almost six-week low of 62.47 against the dollar in the previous session.

There are concerns that the US Federal Reserve may start tapering of economic stimulus as early as next month because of the recent strong data.

Technical analyst Sudarshan Sukhani advised traders to short and cover up at any signs of weakness in the market. In case the downtrend exhausts itself then one can look for buying opportunities.

“We are in some kind of a correction and a correction is a counter trend movement in an ongoing bull market. So corrections are not easy to trade. For today, the suggestion is that if the market shows some kind of weakness then a day trade on the short side is justified but the bigger trade will always come when you buy these dips because eventually this counter trend movement will end and the uptrend will resume,” he told CNBC-TV18 in an interview.

While the Sensex is down 73 points at 20592, Nifty was down 30 points at 6110.

Rupee breaches 63 against $, Sensex down 100 points

9:30 am The Indian equity markets opened in the red this morning after the rupee breached the 63 mark against the US dollar for the first time since 30 September.

The rupee is currently trading at 63.06 per dollar against its previous close of 62.47.The weakness in the rupee is expected to continue as reports indicate that dollar demand by state-run oil marketing companies will continue. On Friday, prices for US Treasuries fell sharply after data showed a stronger-than-expected rise in payrolls for October.

Ashok Gautam of Axis Bank told CNBC-TV18, “Earlier than expected close of the RBI swap window could impact on dollar-rupee movement in medium term.” “If currency markets sense oil related dollar outflows, rupee could come under medium term pressure. The range for the day is seen between 62.2-62.8/USD,” he added.

The Sensex opened 150 points down at20536 while Nifty opened about 33 points down at 6107.

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Banking stocks were the top losers. HDFC Bank fell 1.98 percent, ICICI Bank was down 1.5 percent. BSE bankex fell 1.2 percent and is currently the worst sectoral performer.

Benchmark indices corrected last week as a recent rally in stock prices urged investors to book profits.

Apollo Tyres, SAIL, Reliance Power and Reliance Infra are among the companies that report their quarterly results today

Industrial production data for September would be announced on Tuesday. Besides, the data on inflation based on consumer price index (CPI) for October will be unveiled on Tuesday, while wholesale price index (WPI) numbers will come on Friday.

“Fears of high inflation and good jobs data is spooking the market, said Manish Wadhwan of HSBC India in an interview with CNBC-TV18.

Labor Department reported the US economy added 204,000 jobs in October.

The major earnings announcements this week are - NHPC , Reliance Power , Hindalco Industries , Reliance Communications , Tata Global Beverages, Sun Pharmaceutical Industries , Cipla , Coal India , Mahindra & Mahindra , State Bank of India, Tata Steel , Tata Power and Jaiprakash Associates .

Globally, US markets closed higher but Asian markets are flat.

“Global cues and economic and political scenarios within the country will impact near-term trend. This week, 6,080 shall be a crucial deciding level for Nifty in near-term, and the index is likely to witness further selling below this level,” said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Limited.

Overseas investors have poured in nearly Rs 3,000 crore in the Indian stock market so far this month.

Meanwhile, the US economy saw an addition of 204,000 new jobs in October despite a fortnight long government shutdown, latest government figures had said last week, reflecting an improvement in the condition of the world’s largest economy.

Over the past week, the S&P BSE benchmark Sensex ended lower by 531 points to 20,666.15 after touching an all-time high of 21,321.53 during the first day of the Samvat year 2070.

With inputs from PTI