Benchmarks trade in a tight band; Sensex slips below 28,300 mark

Indian markets continue to trade in tight band in noon deals as there are no cues for the markets to give any direction in either way and the traders remained cautious on the back of weak corporate earnings amid weakness in the global peers. Sentiments remained dampened with report that India's southwest monsoon has been 26% below normal so far in July. According to India Meteorological Department (IMD) data, the shortfall in rains during the week ended July 8 was 50%, while the deficit was 12% for the July 16-22 week. Depreciation in Indian rupee too weighed down sentiments. The rupee weakened 17 paise to 63.93 against the US dollar in noon deals at the Interbank Foreign Exchange.

On the global front, European counters have made a weak start and CAC, DAX and FTSE all were trading in red in early deals. All the Asian equity indices were trading in red at this point of time after a survey showed China’s manufacturing activity crumbled to 15-month lows, rekindling concerns for the region’s exports as the world’s second-largest economy struggles to arrest a broad downturn. Back home, on the sectoral front, consumer durables, infrastructure and fast moving consumer goods witnessed the maximum gain in trade, while capital goods, realty and auto remained the top losers on the BSE sectoral space. The broader indices however, were trading with traction, while the market breadth on the BSE was positive; there were 1,393 shares on the gaining side against 1,105 shares on the losing side while 113 shares remain unchanged.

The BSE Sensex is currently trading at 28293.55, down by 77.29 points or 0.27% after trading in a range of 28259.12 and 28402.64. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index up by 0.19%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.99%, INFRA up by 0.17%, FMCG up by 0.14% and Healthcare up by 0.13%, while Capital Goods down by 0.50%, Realty down by 0.49%, Auto down by 0.45%, IT down by 0.40% and TECK down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 1.39%, Hindalco up by 0.97%, Bharti Airtel up by 0.74%, Sun Pharma up by 0.72% and TCS up by 0.69%. On the flip side, Wipro down by 3.46%, GAIL India down by 2.53%, ICICI Bank down by 2.21%, Lupin down by 1.58% and Tata Motors down by 1.27% 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 8573.65, down by 16.15 points or 0.19% after trading in a range of 8560.55 and 8589.15. There were 24 stocks advancing against 25 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Bank of Baroda up by 3.18%, Tech Mahindra up by 1.67%, Cipla up by 1.56%, Kotak Mahindra Bank up by 1.06% and Hindalco up by 1.01%. On the flip side, Wipro down by 3.57%, GAIL India down by 2.62%, ICICI Bank down by 2.29%, Tata Motors down by 1.46% and Lupin down by 1.35% were the top losers.

Asian markets were trading in red; Hang Seng declined 299.24 points or 1.18% to 25,099.61Nikkei 225 decreased 139.42 points or 0.67% to 20,544.53, Shanghai Composite tumbled 77.44 points or 1.88% to 4,046.49, Jakarta Composite dropped 52.88 points or 1.08% to 4,849.97, Taiwan Weighted slipped 23.26 points or 0.26% to 8,767.86, KOSPI Index shed 19.11 points or 0.93% to 2,045.96, Straits Times dipped 4.28 points or 0.13% to 3,352.09 and FTSE Bursa Malaysia KLCI was down by 2.46 points or 0.14% to 1,719.98.

European Markets were trading in the red; Germany’s DAX lost 0.36%, France’s CAC slipped 0.12% and UK’s FTSE was down by 0.05%.