Benchmarks trade in red in early deals on Monday

After making a flat opening, Indian equity markets are trading in red in early deals on Monday, with the loss of around half a percent that dragged both Sensex and Nifty below crucial 26,300 and 8,000 levels respectively, as investors opted to book some of their profit of previous session’s rally, tracking the weakness in China and the mixed cues from the other Asian markets. The sentiments were further weighed down by depreciation in Indian rupee, which declined by 11 paise at 66.25 per dollar against Friday's close of 66.14 a dollar. Investors' sentiment was also under pressure after the India Meteorological Department (IMD) said in a daily report that for the country as a whole, cumulative rainfall during this year's monsoon season was 12% below the Long Period Average (LPA) until 30 August 2015. Some cautiousness also prevailed ahead of release of gross domestic product (GDP) data for Q1 June 2015 scheduled for today.

In scrip specific development,  Gillette India surged by 7 per cent, extending Friday’s 6% gain on the BSE, after the company reported nearly two-fold jump in operating profit at Rs 52.72 crore for the fourth quarter ended June 30, 2015 (Q4).

On the global front, US markets ended flat on Friday as investors shrugged off concerns that a September rate rise was more likely than some investors expected. Asian markets were trading mostly in red.

Back home traders were seen piling up positions in Healthcare, Oil & Gas, TECK and IT, while selling was witnessed in Metal, Bankex, Power, Capital Goods and FMCG. The market breadth on BSE was negative in the ratio of 782: 856 while 57 scrips remained unchanged. 

The BSE Sensex is currently trading at 26283.85, down by 108.53 points or 0.41% after trading in a range of 26233.60 and 26469.42. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.35%, while Small cap index was down by 0.07%.

The gaining sectoral indices on the BSE were Healthcare up by 1.15%, Oil & Gas up by 0.74%, TECK up by 0.66% and IT up by 0.58%, while Metal down by 1.51%, Bankex down by 0.64%, Power down by 0.57%, Capital Goods down by 0.43% and FMCG down by 0.40% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.14%, Sun Pharma Inds. up by 1.61%, Cipla up by 1.57%, ONGC up by 1.33% and Wipro up by 0.98%. On the flip side, Vedanta down by 3.27%, BHEL down by 2.58%, Tata Motors down by 1.76%, HDFC down by 1.68% and Coal India down by 1.50% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan finally hinting for a rate cut has said that inflation has come down to the comfort zone quicker than expected and he is keeping a watch on data to see how much room is there for further easing of the monetary policy. He said that we are on a phase of accommodation and are looking at the data to see what more room we have.

Talking at an economic symposium Jackson Hole, Wyoming, Rajan said that “You know, like other central banks, we are in a wait-and-watch mode. And as the incoming data are analysed, we are looking to see how much monetary room there is for more accommodation.” He further said that our primary focus is on the inflation outlook. That’s helped by a good monsoon. It’s helped by lower commodity prices. And, you know, it’s hurt by a significant exchange-rate depreciation.

Though, the central bank governor said that his remarks should not be construed as an indication of what the RBI may do at the next monetary policy meeting, but said that we will strive to give you the lowest interest rates that is consistent with our effort at bringing inflation under control.

Rajan said that 'Rate cuts should not be seen as goodies that the RBI gives out stingily after much public pleading. Instead, what is important is sustained low inflation. After cutting its repo rate by 75 basis points this year, the RBI kept the rate on hold at its last policy review. Rajan also stated that he has reached an agreement with the government on a new monetary policy committee that largely meets the goal of transitioning from a system where the governor alone is responsible for decisions in order to insulate it from outside pressure.

The CNX Nifty is currently trading at 7973.50, down by 28.45 points or 0.36% after trading in a range of 7954.30 and 8009.25. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.58%, HCL Tech. up by 1.93%, Cipla up by 1.61%, Sun Pharma Inds. up by 1.51% and ONGC up by 1.40%. On the flip side, Vedanta down by 3.52%, BHEL down by 2.60%, NMDC down by 2.10%, HDFC down by 1.71% and Tata Steel down by 1.68% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 325.98 points or 1.7% to 18,810.34, Hang Seng decreased 130.52 points or 0.6% to 21,481.87, Shanghai Composite decreased 84.27 points or 2.61% to 3,148.08, Taiwan Weighted decreased 36.43 points or 0.45% to 7,982.75, Straits Times decreased 16.97 points or 0.57% to 2,938.97 and KOSPI Index decreased 9.17 points or 0.47% to 1,928.50.

On the flip side, Jakarta Composite increased 29.29 points or 0.66% to 4,475.49