Markets turn red as RBI leaves repo rate, CRR unchanged

Indian equity benchmarks have entered into red terrain in late morning deals with key gauges breaching their crucial 8,650 (Nifty) and 28,400 (Sensex) levels as Reserve Bank of India (RBI) in its first bi-monthly monetary policy statement for 2015-16 kept the repo rate unchanged at 7.5 per cent. Also, the cash reserve ratio (CRR) was unchanged at 4 per cent. Sentiments also remained dampened with domestic ratings agency Crisil saying that credit quality improvement will continue to be gradual in FY 2016 as well, but underlined that large companies are a cause of worry.

On the global front, Asian markets were rallying at this point of time tracking overnight gains on Wall Street. Shanghai Composite is trading at its highest levels since March 2008, while the Japanese market inched higher as the yen weakened. Back home, rate sensitive counters witnessed selling pressure as RBI maintained status quo on key interest rates at its first bi-monthly Monetary Policy for 2015-16 after announcing two rate cuts since the beginning of this calendar year.

On the sectoral front, software, technology and consumer durables witnessed the maximum gain in trade, while realty, banking and infrastructure remained the top losers on the BSE sectoral space. The broader indices too were trading mixed, while the market breadth on the BSE was positive; there were 1,139 shares on the gaining side against 1,028 shares on the losing side while 84 shares remain unchanged.

The BSE Sensex is currently trading at 28370.52, down by 133.94 points or 0.47% after trading in a range of 28370.17 and 28641.08. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.11%, while Small cap index up by 0.18%.

The gaining sectoral indices on the BSE were IT up by 0.32%, TECK up by 0.13%, Consumer Durables up by 0.12%, Metal up by 0.07% and Oil & Gas up by 0.06% while, Realty down by 2.54%, Bankex down by 0.96%, Infrastructure down by 0.75%, Auto down by 0.53% and PSU down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.70%, NTPC up by 1.25%, GAIL India up by 1.23%, Reliance Industries up by 0.91% and TCS up by 0.71%. On the flip side, Axis Bank down by 1.79%, Tata Motors down by 1.52%, SBI down by 1.29%, Sun Pharma down by 1.27% and BHEL down by 1.19% were the top losers.

Meanwhile, power generators operating in special economic zones (SEZs) are going for some tough time, as the government has withdrawn duty benefits extended to operation and maintenance of power plants set up by developers within SEZs.

In February 2009, the Commerce Ministry had allowed SEZ developers to avail duty benefits only at the initial stage of setting up of a power plant in a non-processing area and not for operational and maintenance of the plants, but in 2012, it had extended duty benefits for operation and maintenance of power plants in SEZs also.

Now the ministry in a notification on guidelines for power generation in SEZs said the directive issued in March 2012 was being withdrawn and the position of February 2009 was being restored. The notification came into effect from April 1.

However, it was said that notification will impact developers of SEZs and not the units which are engaged in generation and trading of power in these zones and the developer, who has set up a power plant in processing areas of SEZ and is availing duty benefit, will now have to demarcate that area as non-processing area.

The CNX Nifty is currently trading at 8617.00, down by 42.90 points or 0.50% after trading in a range of 8613.40 and 8693.60. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 1.65%, HCL Tech up by 1.57%, GAIL India up by 1.24%, Tech Mahindra up by 1.12% and NTPC up by 1.05%. On the flip side, Axis Bank down by 2.08%, IDFC down by 1.94%, Tata Motors down by 1.87%, Ambuja Cement down by 1.51% and Sun Pharma down by 1.44% were the top losers.

Asian markets were trading in green; KOSPI Index rose 1.36 points or 0.07% to 2,047.79FTSE Bursa Malaysia KLCI gained 10.51 points or 0.57% to 1,853.45, Straits Times increased 14.21 points or 0.41% to 3,467.12, Jakarta Composite jumped 36.53 points or 0.67% to 5,516.56, Taiwan Weighted advanced 43.18 points or 0.45% to 9,643.50, Shanghai Composite soared 69.91 points or 1.81% to 3,933.84 and Nikkei 225 was up by 220.07 points or 1.13% to 19,618.05.