Markets open on a cautious note ahead of Brexit vote

Business-standard has posted by Markets open on a cautious note ahead of Brexit vote 

Markets have started the day on a cautious note as participants remain edgy ahead of the Brexit referendum due tomorrow that will decide whether UK will stay in European Union or leave.

At 9:15 am, the S&P BSE Sensex is trading 12 points higher at 26,825 and the Nifty50 is up 6 points to quote at 8,225

Geojit BNP Paribas in a technical note says “Inability to add to Monday’s gains, hints at the indecisiveness, and stiffness of the 8,330 resistance, that is in the vicinity. To this end, prices may have to dig deeper to attract enough buying interest. A slippage past 8,000 could set downside moves in motion, but favoured view expects 8,043 to limit the day’s weaknesses.”

Textile and telecom companies have gained in early trades ahead of the Cabinet meet later today which is likely to announce new measures for both the sectors.

In the textile space, Aarvee Denims, Lakshmi Machine Works, Arvind and Bombay Dying have gained between 1%-12%. In the telecom space, Reliance Communication, Bharti Airtel and Idea Cellular are trading with marginal gains.

On the flip side, ITC is trading 0.5% lower as Yogesh Chander Deveshwar is set to step down from executive role from February 2017, after which he will stay on as Non-Executive Chairman.

The Indian rupee depreciated for the third day in a row. It has opened lower by 10 paise at 67.59 per dollar against previous close of 67.49.

GLOBAL MARKETS

Asian markets were trading mixed with Japanese shares losing the most on profit taking after recent gains while the uncertainty ahead of the referendum on Thursday as Britain decides to vote whether to stay in the EU or not also weighed on investor sentiment. Japanese benchmark Nikkei was down over 1% while Hang Seng, China’s Shanghai Composite, Hong Kong’s Hang Seng and Singapore’s Straits Times have climbed between 0.4%-1%. 

US stocks ended with marginal gains after comments on the economy from the US Federal Reserve Chair Janet Yellen with technology shares leading the gains. The Dow Jones industrial average ended up 25 points at 17,830, the S&P 500 ended up 6 points at 2,089 and the Nasdaq gained 7 points to settle at 4,844.

Meanwhile, oil prices climbed in early Asian trading on Wednesday, with US crude joining Brent above $50 a barrel after data from the American Petroleum Institute (API) showed a larger than expected draw on stocks.

US crude inventories fell by 5.2 million barrels for the week ended June 17, the API said. The US government's Energy Information Administration will issue official stockpile data on Wednesday.

KEY STOCKS

Tech Mahindra is up 0.6% after the committee of Board of Directors of the Company on June 21, 2016 approved the proposal to acquire Bio Agency Limited, a UK based entity.

Tata Power climbed 0.6% after its 100% subsidiary Tata Power Renewable Energy (TPRE) has won 30 MW solar gird connected PV project in Maharashtra under the National Solar Mission.

Muthoot Finance has gained 1% after the company said it has completed acquisition of Muthoot Insurance Brokers Pvt Ltd (MIBPL) by transfer of equity shares from its existing shareholders for a consideration of Rs 20 crore.

Kwality has surged 2% after the company said its board will meet on June 24, 2016, inter alia, to raise funds upto Rs. 300 crore by way of term loan and issue of non-convertible debentures.

Pune based Bajaj Finance- non-banking arm of Bajaj Finserve tied up with Future Group, to provide easy EMI to customers on groceries to household essentials of up to Rs 3 lakhs. The stock surged over 1%.

Country's largest carmaker Maruti Suzuki said it is ramping up production of premium hatchback Baleno to meet the current demand and reduce waiting period. The stock is trading flat.

Auto stocks continue to gain on the back of advancement of monsoons. M&M, Hero Motocorp and Bajaj Auto have climbed between 0.2%-0.5%.

Technology stocks continue the upward march on the back of a depreciating rupee. Wipro and Infosys have gained 0.4% each.

Also, energy majors are witnessing fresh buying as crude oil prices soared in the morning trades. ONGC, GAIL are up 0.5% each while RIl is trading with mild losses