Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors engaged in reducing positions ahead of a host of macroeconomic numbers such as IIP and inflation data, to be released this week. The sentiments remained dampened on the report that foreign investors have started to take money off the Indian markets and the trend is likely to continue as other markets such as Korea and Taiwan have become more attractive. Foreign portfolio investors (FPIs) sold shares worth a net Rs 550.29 crore on June 5, 2015, as per provisional data released by the stock exchanges. Investors sentiment were further dampened tracking weakness among global markets on the back of a firm US jobs data raising fear of Fed interest rate hike. However, losses remained capped with Railway Minister Suresh Prabhu statement that his department has signed initial agreements with 20 states. Meanwhile, Indian Metrological Department (IMD) statement that the prediction of below average monsoon is for the cumulative rainfall for the season, and added that agriculture will not suffer much if the distribution of rainfall across the country is uniform and timely.

On global front, Asian stock markets were mostly lower on Monday, with investors reacting to key economic data from the region. Further, the US stock market closed mostly lower Friday as an upbeat jobs report lifted expectations for an interest-rate hike this fall. US non-farm payrolls jumped 280,000 last month, the largest gain since December, while payrolls for March and April were revised to show 32,000 more jobs were created than previously reported. Back home, Indian rupee weakened 28 paise to trade at 64.03 against the dollar in early trade on capital outflows by foreign funds amid strengthening of the American currency against others overseas.

Back on street, stocks from Capital Goods and Metal counters were supporting the markets’ uptrend, while those from Banking, Infrastructure and Auto counters were adding to the underlying cautious undertone. In scrip specific development, Shares of drug maker Wockhardt have declined after the company recalled over 200 bottles of Captopril tablets, used in treatment of blood pressure, and Clarithromycin antibiotic tablets manufactured in the US because of deviations in current good manufacturing practice norms stated by US Food and Drug Administration. On the other hand, shares of 3M India have surged after the company inked pact with Amazon to sell products for B2B customers.

The market breadth on BSE was negative, out of 2084 stocks traded, 799 stocks advanced, while 1201 stocks declined on the BSE.

The BSE Sensex is currently trading at 26649.07, down by 119.42 points or 0.45% after trading in a range of 26588.70 and 26827.06. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.67%, while Small cap index down by 0.47%.

The only gaining sectoral indices on the BSE were Capital Goods up by 0.34% and Metal up by 0.22%, while Bankex down by 0.86%, Infrastructure down by 0.82%, Auto down by 0.77%, Oil & Gas down by 0.66% and Consumer Durables down by 0.59% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.63%, Tata Power up by 1.20%, Larsen & Toubro up by 1.05%, Bajaj Auto up by 0.94% and Wipro up by 0.69%. On the flip side, Tata Motors down by 2.01%, Hindustan Unilever down by 1.64%, Bharti Airtel down by 1.55%, Cipla down by 1.55% and HDFC down by 1.38% were the top losers.

Meanwhile, After the third rate cut by Reserve Bank of India (RBI) and governor saying that a repo rate cut is a direct way to reduce cost of funds for banks, the Finance Minister Arun Jaitley will be meeting the heads of public sector banks (PSU) on June 12 to review the banks' annual performance and bad loans situation as also to persuade them to pass on RBI's rate cut benefit to borrowers for propping growth.

The minister will be reviewing credit offtake and the progress made under the Jan Dhan Yojana and Prime Minister social security scheme among other things and will also deliberate on the issue of non-performing assets (NPAs) and discuss ways to contain this. Gross NPAs of PSU banks have gone up to Rs 2,60,531 crore as on December 2014, as per the RBI data. Jaitley had termed NPAs at 5.2 per cent as high and said it is too early to consider the improvement in the bad loan situation last quarter as a 'turnaround' and was keeping his fingers crossed.

It has been reported that during the quarterly meeting attended by heads of public sector financial institutions such as Nabard and NHB, the Finance Minister would also review the progress made with regard to decisions taken at the two-day Gyan Sangam and would also discuss improving the performance of the PSBs and financial institutions, including through steps like capital infusion in the meeting.

The CNX Nifty is currently trading at 8068.85, down by 45.85 points or 0.57% after trading in a range of 8053.80 and 8131.00. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.78%, Tata Power up by 1.13%, Bajaj Auto up by 1.06%, Larsen & Toubro up by 0.97% and Zee Entertainment up by 0.71%. On the flip side, PNB down by 3.38%, Bank of Baroda down by 3.15%, Cairn India down by 2.46%, Indusind Bank down by 2.31% and Tata Motors down by 1.98% were the top losers.

Most of Asian markets were trading in red; KOSPI Index down by 0.08%, FTSE Bursa Malaysia KLCI down by 0.39%, Straits Times down by 0.21%, Nikkei 225 down by 0.11% and Jakarta Composite down by 1.09%. On the other hand, shanghai Composite up by 1.46%, Taiwan Weighted up by 0.49% and Hang Seng up by 0.38%.