Benchmarks extend losses in noon deals as RBI maintains status quo

In a knee jerk reaction to Reserve Bank of India’s (RBI) status quo stance, Indian equity benchmarks extended their southward journey and declined by around half a percent in noon deals. Although RBI’s policy stance was much on expected lines where it left its key interest rate unchanged at 7.25%, raising the possibility of a rate cut later in the year. Meanwhile, India Meteorological Department (IMD) said that India’s southwest monsoon in the remaining two months of the four-months season, that is in August and September, is expected to be below normal at 84 per cent of the long-period average (LPA) as El Nino weather conditions have strengthened in the past few month.

Global cues too remained sluggish, with European counters making a weak start with CAC, DAX and FTSE, all trading in red in early deals. Most of the Asian markets were trading in red at this point of time after downbeat economic data pressured Wall Street ahead of a key US jobs report that could provide important clues to the timing of the Federal Reserve’s interest rate increase.

Back home, on the sectoral front, metal, auto and public sector undertaking witnessed the maximum gain in trade, while oil and gas, consumer durables and software remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1,399 shares on the gaining side against 1,195 shares on the losing side while 108 shares remain unchanged.

The BSE Sensex is currently trading at 28063.00, down by 124.06 points or 0.44% after trading in a range of 27963.71 and 28264.72. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.52%, while Small cap index up by 0.32%.

The few gaining sectoral indices on the BSE were Metal up by 0.42%, Auto up by 0.38%, PSU up by 0.31% and Bankex up by 0.08%, while Oil & Gas down by 0.61%, Consumer Durables down by 0.53%, IT down by 0.47%, FMCG down by 0.46% and Realty down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.41%, Coal India up by 1.25%, SBI up by 0.96%, Hindalco up by 0.90% and Dr. Reddys Lab up by 0.61%. On the flip side, GAIL India down by 2.43%, ONGC down by 2.07%, Infosys down by 1.67%, Reliance Industries down by 1.45% and Tata Motors down by 1.43% were the top losers.

Meanwhile, in the financial year 2015, Foreign Direct Investment (FDI) in petroleum and natural gas sector has witnessed ten-fold jump. During the year FDI surged to Rs 6,473.22 crore, as compared to Rs 678.39 crore in FY14 and Rs 1,192.57 crore in financial year 2013. Over the previous three financial years, the sector has received FDI worth more than Rs 8,375 crore.

In order to increase domestic investment and technological capabilities, Union Minister Dharmendra Pradhan has said the government is encouraging foreign investment in the sector. The minister further added that there was highest investment in exploration and production of oil and natural gas, followed by refineries and marketing including pipelines network and LNG re-gasification infrastructure. Besides, the government is planning to set up 15,000 kilometres of new pipeline.

In the first three months of current financial year, the sector has received FDI worth Rs 31.35 crore. During the financial year from 2013 to end of June 2015, the Plan Capital Investment in the sector has reached Rs 2,59,278.83 crore. The government has allowed 100 percent FDI in the sector in exploration and production, refining by the private companies and marketing of petroleum products, among other areas.

The CNX Nifty is currently trading at 8512.90, down by 30.15 points or 0.35% after trading in a range of 8486.05 and 8565.15. There were 20 stocks advancing against 29 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Tech Mahindra up by 3.48%, Asian Paints up by 2.39%, BPCL up by 2.32%, PNB up by 1.81% and Bank of Baroda up by 1.30%. On the flip side, Idea Cellular down by 4.22%, Cairn India down by 2.97%, GAIL India down by 2.50%, Indusind Bank down by 2.19% and ONGC down by 2.12% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 27.75 points or 0.14% to 20,520.36, FTSE Bursa Malaysia KLCI declined 17.66 points or 1.01% to 1,726.53, Taiwan Weighted slipped 13.55 points or 0.16% to 8,510.86, Jakarta Composite shed 10.58 points or 0.22% to 4,789.60 and Straits Times was down by 8 points or 0.25% to 3,184.79.

On the flip side, KOSPI Index increased 19.5 points or 0.97% to 2,027.99, Hang Seng rose 45.84 points or 0.19% to 24,457.26 and Shanghai Composite was up by 119.11 points or 3.29% to 3,742.01.

European Markets were trading in the red; Germany’s DAX lost 0.29%, France’s CAC dropped 0.29% and UK’s FTSE was down by 0.07%.