Benchmarks make lower start amid weak global cues

Magnifying their last session’s losses, Indian equity markets have made a negative start and are trading in red on weak global cues. The sentiments were also under pressure on report that the India's southwest monsoon so far in July has been 26% below normal.  At present, Sensex and Nifty were trading below the crucial 28,350 and 8,600 levels respectively, with losses of around quarter a percent. However, the session was productive for broader indices, which were trading with gains in the range of 0.15-0.30%. Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 185.42 crore on July 23,2015, as per provisional data released by the stock exchanges.  In scrip specific development, G M Breweries soared 20% in early morning trades, after the company reported an over three-fold jump in standalone net profit at Rs 15.89 crore for the quarter ended June 30, 2015 (Q1).

On the global front, the US markets ended lower following disappointing corporate results. Asian markets were trading mostly in red tracking the negative lead from Wall Street for a third straight session and the continued fall in commodity prices. Data showing that China's manufacturing activity fell to a 15-month low also dampened sentiment.

Back home traders were seen piling up position in Consumer Durables, Healthcare, Metal, Oil & Gas and PSU, while selling was witnessed in  Capital Goods, Auto, Bankex, Power and INFRA. The market breadth on BSE was positive in the ratio of 1068:654 while 70 scrips remained unchanged.

The BSE Sensex is currently trading at 28311.10, down by 59.74 points or 0.21% after trading in a range of 28259.12 and 28402.64. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index added 0.29%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.07%, Healthcare up by 0.43%, Metal up by 0.39%, Oil & Gas up by 0.26% and PSU up by 0.12%, while Capital Goods down by 0.34%, Auto down by 0.30%, Bankex down by 0.24%, Power down by 0.24% and INFRA down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 1.24%, Sun Pharma Inds. up by 1.08%, TCS up by 0.99%, Axis Bank up by 0.82% and Bajaj Auto up by 0.76%. On the flip side, Wipro down by 2.32%, ICICI Bank down by 2.05%, GAIL India down by 1.81%, Mahindra & Mahindra down by 1.13% and SBI down by 1.06% were the top losers.

Meanwhile, the Finance Ministry has come up with a revised draft of the Indian Financial Code (IFC) and sought stakeholders’ comments on the same by August 8, 2015. The Draft IFC, which has been revised in the light of the comments received from the public at large and all stakeholders through a Press Release on 6th June 2013, includes modifications mainly related to the strengthening the regulatory accountability of financial agencies, removing the provision empowering FSAT to review Regulations, rulemaking and operational aspects of capital controls, monetary policy framework and composition of the Monetary Policy Committee (MPC), regulation of systematically important payment system and others, removing the provision of special guidance etc.

Government has further stated that the modifications have taken into consideration the enactments subsequent to the submission of the FSLRC report; namely The Pension Fund Regulatory and Development Authority Act, 2013 (PFRDA Act) and Securities Laws (Amendment) Act, 2014. The government has also said that the modifications in the revised draft IFC remain consistent with the overall structure and philosophy of the FSLRC report.

The most striking feature of the Draft IFC is that Monetary Policy making will become a government affair rather than being a preserve of the Reserve Bank of India. The draft, put out by the Finance Ministry, among other things recommends setting up a seven-member Monetary Policy Committee (MPC) to decide on the policy rate by majority vote. Crucially, four of these members are to be appointed by the government and three members from the RBI side. The government has proposed taking away the RBI governor’s authority to veto the interest rate decision of the Central bank’s monetary policy committee. Currently, the governor consults a technical advisory committee, but does not necessarily go by the majority opinion while deciding on the monetary policy stance.

The CNX Nifty is currently trading at 8577.90, down by 11.90 points or 0.14% after trading in a range of 8560.55 and 8589.15. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bank Of Baroda up by 1.70%, Indusind Bank up by 1.23%, Hindalco up by 1.20%, Sun Pharma up by 1.04% and TCS up by 0.99%. On the flip side, Wipro down by 2.61%, ICICI Bank down by 2.08%, GAIL India down by 1.86%, Mahindra & Mahindra down by 1.25% and SBI down by 1.22% were the top losers.

Asian markets were trading in red; Hang Seng decreased 218.88 points or 0.86% to 25,179.97, Nikkei 225 decreased 138.86 points or 0.67% to 20,545.09, Jakarta Composite decreased 49.12 points or 1% to 4,853.73, Taiwan Weighted decreased 35.16 points or 0.4% to 8,755.96, KOSPI Index decreased 18.41 points or 0.89% to 2,046.66, Straits Times decreased 6.77 points or 0.2% to 3,349.60 and FTSE Bursa Malaysia KLCI decreased 4.31 points or 0.25% to 1,718.13.

On the flip side Shanghai Composite increased 44.02 points or 1.07% to 4,167.94.