Benchmarks continue to trade in red amid selling in IT, FMCG stocks

Indian equity benchmarks continued to trade in red in the afternoon session as selling momentum in the equities persisted, however the losses were capped and marginal recovery from day's low levels was seen as buying appeared in infra, power and capital goods stocks. Though selling in FMCG, IT and teck stocks restrained the major indices in negative territory. RBI’s decision to keep key policy rate unchanged at 8% dented the investors’ sentiments, moreover FIIs outflow in the previous session and mixed Asian cues also weighed on sentiments. Sector wise, oil scrips were on the sellers’ list after excise duty on petrol was hiked by Rs 2.25 per litre and by Re 1 a litre on diesel. IT stocks were also under pressure as Rupee, which had breached 62-mark against dollar in previous sessions strengthened to 61.87 levels. On the other hand, shares of companies engaged in insurance business higher by up to 8% on hopes of foreign direct investment (FDI) in the sector. Meanwhile, broader markets were outperforming the benchmarks with high margin with both the mid and small cap indices trading up by over 1.50%. In scrip specific movement, shares of Ceat has dipped 3.4% to Rs 867 after fresh shares allotted to qualified institutional buyers (QIBs) began to trade in current session.

On global front, most of the Asian markets were trading in green with Taiwan Weighted up by 1.55% and Hang Seng down 0.44%.  Back home, the NSE Nifty and BSE Sensex were trading below their psychological 8,600 and 28,500 levels respectively. The market breadth on BSE was positive, out of 2,567 stocks traded, 1,717 stocks advanced, while 759 stocks declined on the BSE.

The BSE Sensex is currently trading at 28411.59, down by 32.42 points or 0.11% after trading in a range of 28370.73 and 28504.65. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.52%, while Small cap index up by 1.53%.

The gaining sectoral indices on the BSE were INFRA up by 1.11%, Power up by 1.11%, Capital Goods up by 1.09%, Auto up by 0.90%, Consumer Durables up by 0.85%. On the other hand, FMCG down by 0.69%, IT down by 0.33% and TECK down by 0.20% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.50%, Sesa Sterlite up by 1.96%, Axis Bank up by 1.37%, Mahindra & Mahindra up by 1.22% and NTPC up by 0.85%. On the flip side, Dr. Reddys Lab down by 1.95%, HDFC down by 1.57%, ITC down by 1.45%, Infosys down by 1.19% and HDFC Bank down by 0.86% were the top losers.

Meanwhile, with Reserve Bank of India (RBI) keeping interest rates unchanged, Finance Minister has stated that RBI has taken note of the structural change in the outlook for inflation. The ministry is further looking forward to the central bank to support revival of growth and employment.

In line with general expectations, the RBI, in the fifth Bi-Monthly Monetary Policy review, 2014-15, kept the key policy rate unchanged at 8.0 per cent. Similarly the cash reserve ratio (CRR) of scheduled banks was kept unchanged at 4.0 per cent of NDTL. Consequently, the reverse repo rate under the under the liquidity adjustment facility (LAF) will remain unchanged at 7.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate will stand at 9.0 per cent.

Referring to the proposed new monetary policy framework, Finance Ministry stressed that the Government and RBI will work towards a monetary policy framework that will help institutionalize the gains achieved on the inflation front, so as to reduce inflationary expectations and further support the revival of investment and growth. Further, the new monetary policy framework involves setting of a formal inflation target and accountability to deliver on inflation front. The RBI has set the CPI inflation target at 6% by January 2015.

The CNX Nifty is currently trading at 8524.20, down by 0.50 points or 0.01% after trading in a range of 8508.35 and 8540.60. There were 32 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 7.71%,  BHEL up by 3.67%, Asian Paints up by 2.67%, Indusind Bank up by 2.32% and Sesa Sterlite up by 2.12%. On the flip side, Dr Reddys Lab down by 2.02%, ITC down by 1.76%, HDFC down by 1.70%, Infosys down by 1.17% and Zee Entertainment down by 1.00% were the top losers.

Asian markets were trading mixed; KOSPI Index up by 4.08 points or 0.21% to 1,969.91, Straits Times up by 11.99 points or 0.36% to 3,334.31, Shanghai Composite up by 16.74 points or 0.61% to 2,780.28, Nikkei 225 up by 64.83 points or 0.37% to 17,728.05 and Taiwan Weighted up by 140.47 points or 1.55% to 9,175.26. While, Hang Seng down 102.92 points or 0.44% to 23,551.38, Jakarta Composite down 15.37 points or 0.3% to 5,160.43 and FTSE Bursa Malaysia KLCI down 15.03 points or 0.84% to 1,770.94.