Markets continue to sulk in red; Nifty holds 8,400 mark

Local equity markets continued trading weak after prospects of sooner-than-expected US rate hikes diminished the appeal of emerging markets’ assets, including equities. Besides, absence of fresh positive cues also weighed on the pessimistic sentiment of local equity markets, which after making a gap down start just went on losing ground to trade at day’s low point. Both, Sensex and Nifty taking a knock of over half of a percent were trading below psychologically crucial 27,750 and 8,450 levels respectively.

On the global front, Asian shares edged higher on Monday, however gains were capped by concerns that market volatility may intensify as the US central Bank prepares to raise interest rates for the first time in six years. US Federal Reserve Chair Janet Yellen indicated on Friday that it was poised to raise rates this year if the economy keeps improving as expected, though a raft of recent data has suggested it is growing only modestly in the second quarter.

Closer home, most of the sectoral indices on BSE were trading into negative territory, nevertheless major drubbing was visible on stocks from FMCG, Metal and Capital Goods counters. On the flip side, maximum buying was witnessed by stocks from Infrastructure and Technology counters which were the top gainers. Meanwhile, PSU OMCs edged higher as global crude oil prices slid. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1332:1053; while 107 shares remained unchanged.

The BSE Sensex is currently trading at 27702.60, down by 254.90 points or 0.91% after trading in a range of 27700.54 and 27903.29. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap and Small cap index were both down by 0.01%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.27%, INFRA up by 0.10%, while FMCG down by 1.38%, Metal down by 1.35%, Capital Goods down by 0.89%, Bankex down by 0.46%, IT down by 0.41% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.89%, ONGC up by 1.12%, Mahindra & Mahindra up by 0.26% and Wipro up by 0.06%. On the flip side, ITC down by 2.60%, Vedanta down by 1.90%, HDFC down by 1.83%, Coal India down by 1.68% and BHEL down by 1.56% were the top losers.

Meanwhile, traders body Confederation of All India Traders (CAIT) has asked the government to annul the policy of 51% FDI in multi-brand retail sector on account of contradictory statements made by Union Finance Minister Arun Jaitley and Commerce Minister Nirmala Sithraman on FDI retail notification, which has created a lot of confusion in the trading community.

BJP led government, on May 12 notified the consolidated FDI policy document, wherein it retained the previous UPA government's decision of allowing foreign retailers to open multi-brand stores with 51 per cent ownership, sparking speculations that government had now turned its side in the favour of multi-brand retail, which was its pre-election manifesto that won its commanding majority from an electorate. However, Finance minister, Arun Jaitley then said that his government was never in favour of allowing foreign direct investment in multi-brand retail and a recent government notification published only the existing policies that were decided by the UPA government.

Trades body argued that continuation of the notification allowing FDI in multi-brand retail as a policy of the present government had no logic since it was bitterly opposed by the BJP and other NDA partners. Taking this forward, CAIT representatives will soon be meeting Jaitley and Sitharaman to demand repealing of the 51 per cent FDI notification.

Besides this, the RSS-affiliated Swadeshi Jagran Manch (SJM) and small traders, have also the BJP of doing a-U turn on the FDI issue have urged the government to scrap the policy allowing 51 per cent FDI in multi-brand retail. The SJM said it failed to understand the change in the BJP’s position after it came to power as in Opposition it had firmly opposed the move and had even organised a Bharat Bandh on the issue.

The CNX Nifty is currently trading at 8425.55, down by 33.40 points or 0.39% after trading in a range of 8414.95 and 8441.95. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 3.02%, Bharti Airtel up by 2.65%, BPCL up by 2.39%, Lupin up by 2.25% and HCL Tech. up by 1.72%. On the flip side, ITC down by 2.86%, Ambuja Cement down by 2.48%, Coal India down by 1.92%, Asian Paints down by 1.83% and HDFC down by 1.41% were the top losers.

Asian markets were trading mostly higher; with Taiwan Weighted trading higher by 6.37 points or 0.07% to 9,645.17; Straits Times trading higher by 11.37 points or 0.33% to 3,461.55; KOSPI Index trading higher by 23.29 points or 1.1% to 2,146.10; Nikkei 225 trading higher by 149.36 points or 0.74% to 20,413.77; Shanghai Composite trading higher by 156.2 points or 3.35% to 4,813.80; Hang Seng trading higher by 469.11 points or 1.7% to 27,992.83.

On the flip side, Jakarta Composite trading lower by 23.96 points or 0.45% to 5,291.19 and FTSE Bursa Malaysia KLCI trading lower by 19.76 points or 1.11% to 1,767.74 were the top losers of the session.