Benchmarks continue weak trade; Nifty holds 8,500 mark

Indian equity markets trimmed losses and continued trading in red in the late afternoon session on account of selling in frontline blue chip counters. The sentiments were under pressure after Reserve Bank of India (RBI) maintained status quo, keeping the repo rate unchanged at 7.25 percent and CRR unchanged at 4 percent. Investors were cautious after India Meteorological Department (IMD) stated that India’s southwest monsoon in the remaining two months of the four-month season, that is in August and September, is expected to be below normal at 84 percent of the long-period average (LPA) as El Nino weather conditions have strengthened in the past few months. Traders were seen piling position in Metal, Auto and PSU stock, while selling was witnessed in Oil & Gas, Consumer Durables and Capital Goods sector stocks. In scrip specific development, Nutraplus India was trading firm after reporting that it will start commercial production from first week of September 2015 at Plant N-92, MIDC, Tarapur in Maharashtra.

On the global front, the Asian markets were trading mostly in red, while the European markets were trading mostly on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,550 and 28,100 levels respectively. The market breadth on BSE was positive in the ratio of 1411:1344 while 126 scrips remained unchanged.

The BSE Sensex is currently trading at 28072.13, down by 114.93 points or 0.41% after trading in a range of 27866.12 and 28264.72. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.75%, while Small cap index up by 0.40%.

The gaining sectoral indices on the BSE were Metal up by 1.29%, Auto up by 0.63%, PSU up by 0.39%, Bankex up by 0.29% and Power up by 0.06%, while Oil & Gas down by 0.84%, Consumer Durables down by 0.69%, Capital Goods down by 0.50%, FMCG down by 0.44% and TECK down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 1.99%, Mahindra & Mahindra up by 1.86%, Tata Steel up by 1.45%, Coal India up by 1.40% and SBI up by 1.28%.

On the flip side, GAIL India down by 2.60%, ONGC down by 2.56%, Tata Motors down by 1.95%, Wipro down by 1.67% and Infosys down by 1.52% were the top losers.

Meanwhile, industry body, Federation of Indian Chambers of Commerce and Industry (FICCI), has lauded government’s plan to recapitalise public sector banks (PSU Banks) with infusion of Rs 70,000 crore over the next four years and said that it augurs well for the banking sector and will help fuel economic growth.

FICCI President Jyotsna Suri said that “This is a positive development as it would help meet both the capital adequacy requirements of the banks as well as help build on-lending capacity to fuel growth in the economy. FICCI welcomes this move and hopes that as public sector banks get further support from the government, they would also introduce a cut in lending rates commensurate with cuts announced by RBI in the policy rate”.

She said that FICCI has been suggesting that the fiscal space created on account of savings in fuel subsidies and increased tax revenues due to better coverage and compliance should be utilised for recapitalisation of the banks.

The FICCI president also said that this four year plan announced by the government augurs well for the health of the banking sector and is another step forward in government’s concerted efforts to enhance growth of the economy.

Recently, the finance ministry announced four-year road map for infusing Rs 70,000 crore in state run banks. As part of the plan, the government would infuse Rs 25,000 crore each into PSBs in the current and the next fiscal and then follow it up with Rs 10,000 crore each in 2017-18 and 2018-19.

The CNX Nifty is currently trading at 8517.90, down by 25.15 points or 0.29% after trading in a range of 8448.25 and 8565.15. There were 23 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 4.66%, Asian Paints up by 2.57%, BPCL up by 2.24%, Hindalco up by 2.22% and Bank of Baroda up by 2.03%.

On the flip side, Idea Cellular down by 3.51%, Cairn India down by 3.24%, ONGC down by 2.91%, GAIL India down by 2.29% and IndusInd Bank down by 2.24% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 27.75 points or 0.14% to 20,520.36, Jakarta Composite decreased 23.78 points or 0.5% to 4,776.40, FTSE Bursa Malaysia KLCI decreased 19.88 points or 1.14% to 1,724.31, Taiwan Weighted decreased 13.55 points or 0.16% to 8,510.86, Straits Times decreased 7.42 points or 0.23% to 3,185.37 and Hang Seng decreased 5.3 points or 0.02% to 24,406.12.

On the other hand, KOSPI Index increased 19.5 points or 0.97% to 2,027.99 and Shanghai Composite increased 133.64 points or 3.69% to 3,756.55.

The European markets were trading mostly in green; Germany’s DAX increased 0.31 points or 0% to 11,444.03, UK’s FTSE 100 increased 9.27 points or 0.14% to 6,697.89 while, France’s CAC decreased 18.99 points or 0.37% to 5,101.53.