Benchmarks trade lower on weak global cues

Pressurized by weak global cues, Indian equity benchmarks are trading with a cut of around half a percent in early deals on Monday. The US markets managed a close of modest green in the previous session; there were some weak economic news that restricted any major gain in the market, while the Iraqi crisis also kept looming large. Most of the Asian markets were trading in the red at this point of time amid an escalation of violence in Iraq, which has pushed oil prices higher, lessening the equity risk appetite.

Back home, traders remained on sidelines ahead of wholesale price index (WPI) data to be released later in the day. Meanwhile, the rupee weakened to 60 to a dollar in morning deals, its lowest in more than a month, as strong demand for the greenback from oil marketing companies weighed after global crude prices surged to nine-month highs on Friday. The rupee was at 59.98/99 after hitting 60.00, a level last seen on May 12. However, losses remained capped up to certain extent on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,099.92 crore on Friday, as per provisional data from the stock exchanges.

On the sectoral front, software, technology and healthcare witnessed the maximum gain in trade, while power, capital goods and realty remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 1414 shares on the gaining side against 537 shares on the losing side while 54 shares remain unchanged.

The BSE Sensex opened at 25239.50; around 11 points higher compared to its previous closing of 25228.17, and has touched a high and a low of 25268.41 and 25084.79 respectively. The index is currently trading at 25104.08, down by 124.09 points or 0.49%. There were 7 stocks advancing against 23 declines on the index.

The overall market breadth has made a weak start with 26.78% stocks advancing against 70.52% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices down by 1.81% and 1.88% respectively. 

The few gaining sectoral indices on the BSE were, while IT up by 1.17%, TECk up by 0.69%, Healthcare up by 0.33% and FMCG up by 0.29%, while Power down by 2.80%, Capital Goods down by 2.48%, Realty down by 2.32%, PSU down by 2.10% and Consumer Durables down by 1.88% was the top losers on the sectoral index.

The top gainers on the Sensex were TCS up by 2.14%, Infosys up by 1.49%, Bajaj Auto up by 1.39%, Sun Pharma up by 1.28% and ITC up by 1.03%. On the flip side, Tata Power was down by 3.62%, L&T was down by 2.42%, Coal India was down by 2.21%, M&M was down by 2.16% and BHEL was down by 2.10% were the top losers on the Sensex.

Meanwhile, in line with recommendations of Nachiket Mor Committee, the RBI will soon come out with India's first payment bank, which will provide deposit and payment services but wouldn’t lend, considering country’s potential for huge financial inclusion.

However, before coming out with the payment bank, the RBI will issue guidelines for it and is also in discussion with government for a framework on differentiated bank licences. Additionally, central bank’s deputy governor, H. R. Khan, highlighted that RBI was in process of issuing guidelines on universal commercial banking licences and will also be floating norms for small banks in the private sector along with mid-sized universal commercial bank.

However, the guidelines on universal commercial banking, will not be based on a single window, but it will be ‘on tap’. The RBI, in April, had given in-principle approval for setting up of banks to IDFC and Kolkata-base micro lender Bandhan. The two banks were selected from the list of 26 applicants, including state-run IFCI and private sector Anil Ambani group and Aditya Birla group, Bajaj Finance, Muthoot Finance, Religare Enterprises and Shriram Capital, among others.

Further, RBI’s deputy governor announced that the central bank was in discussion with the government to revamp inflation-indexed bonds to attract more retail investors. The bonds, introduced in June last year by the central bank, aimed at giving returns that exceed the rate of inflation to ensure that rising prices don't eat into the value of investor savings, failed to garner required interest from investors, which failed to understand its complex structure. He, further underscored that RBI was in process for improvising the features of these bonds for attracting more retail investors.

The CNX Nifty opened at 7,534.80; about 8 points lower as compared to its previous closing of 7,542.10, and has touched a high and a low of 7,548.60 and 7,490.75 respectively. The index is currently trading at 7,490.85, up by 51.25 points or 0.68%. There were 8 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were TCS up by 1.94%, ITC up by 1.38%, Bajaj Auto up by 1.35%, Sun Pharma up by 1.21% and Infosys up by 1.20%. On the flip side, Tata Power down by 4.39%, PNB down by 3.38%, Bank of Baroda down by 2.84%, Coal India down by 2.63% and Indusind Bank down by 2.61% were the major losers on the index.

Asian equity indices were trading mostly in the red; Nikkei 225 tumbled 160.15 points or 1.06% to 14,937.69, Hang Seng slipped by 22.52 points or 0.10% to 23,296.65, KOSPI Index declined 0.57 points or 0.03% to 1,990.28, Jakarta Composite dipped by 13.88 points or 0.28% to 4,912.78, Straits Times declined by 0.19 points or 0.01% to 3,293.06 and FTSE Bursa Malaysia KLCI was down by 3.74 points or 0.20% to 1,873.00.

On the flip side, Shanghai Composite was up by 3.82 points or 0.18% to 2,074.53.