Benchmarks trade near intra-day low level in late morning session

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 300 points and Nifty falling below the 7700 level, on sustained selling by funds and retail investors ahead of RBI's monetary policy review. The market was betting on Governor Raghuram Rajan obliging with a small 25 basis point cut in his fourth bi-monthly monetary policy announcement. Besides, depreciation in the rupee, which fell by 32 paise to 66.37 against the US dollar, weighed on sentiments. Markets have witnessed a gap down opening mirroring losses in the global equities with US markets taking a hit on worries about the health of Chinese economy after China's industrial profits fell 8.8% in August amid slump in the commodity prices. Sentiments remained down-beat on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 650.01 crore on September 28, 2015. Investors failed to draw any sense of relief with Finance Minister Arun Jaitley’s statement that he is confident of maintaining fiscal deficit at 3.9 per cent in the current financial year and extremely keen to better the 7.3 per cent growth of fiscal year 2014-15.

On the global front, Asian stock markets tumbled in early trade, extending a global market sell-off triggered by grim corporate news, expectations of a Fed rate hike and jitters about the Chinese economy. Stocks on Wall Street ended sharply lower on Monday amid growth concerns in China and prospects of a rate hike by the US Federal Reserve. European markets too closed about 2 percent lower, pressured by continued concerns about Glencore and Volkswagen. Back on street, stocks from IT counters were supporting the markets’ uptrend, while those from Banking, Realty and Oil & Gas counters were adding to the underlying cautious undertone. Metal stocks have taken a beating in the early morning trades owing to a further slump in the commodity prices amid economic slowdown in China. In scrip specific development, shares of Reliance Industries surged on the report that Reliance Industries is planning to raise $1.5 billion through external commercial borrowings (ECB) to refinance its old loans. Furthermore, Andhra Bank rose after the Bank has inked memorandum of understanding (MoU) with Honda Motorcycle & Scooter India (HMSI) for financing Honda 2-wheelers.

The market breadth on BSE was negative, out of 2138 stocks traded, 831 stocks advanced, while 1197 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25313.10, down by 303.74 points or 1.19% after trading in a range of 25287.33 and 25496.38. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.32%, while Small cap index down by 1.20%.

The only gaining sectoral index on the BSE was IT up by 0.33%, while Bankex down by 2.35%, Realty down by 2.03%, Oil & Gas down by 1.89%, Metal down by 1.85% and PSU down by 1.34% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 0.76%, Infosys up by 0.70%, Coal India up by 0.55%, Wipro up by 0.20% and BHEL up by 0.05%. On the flip side, Vedanta down by 5.76%, ICICI Bank down by 3.95%, Hindalco down by 3.47%, Axis Bank down by 3.32% and Dr. Reddys Lab down by 3.22% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has said that the government is open to dilute its stake in public sector banks to 52 per cent. He said that “We are willing to look at all other changes including bringing down government equity to 52 per cent (in state-run banks), and therefore giving additional financial strength and teeth to the banking institutions themselves”.

Jaitley who was addressing the 68th Annual General Meeting of Indian Banks Association, also said the state-run lenders need to be given independence and should be kept away from any political interference. He added that even Prime Minister Narendra Modi has said that no bank should ever receive formal or informal directives from the government and had advised the banks to operate essentially and exclusively on banking considerations.

The FM said that government would also consider other issues including problems tied to distressed state power providers. He further stated that our distribution networks through the national grids have improved, but the final access is by the state discoms and at the level of state discoms reforms have been carried out in very few states. He further said that RBI has put those state governments on notice that if they do not charge adequately and make users pay for the power supplied the banking system at its own peril cannot continue to support them.

In the major public sector banks, the government owns over 59 per cent stake in largest public sector lender SBI, 76.5 per cent stake in IDBI Bank, nearly 64.5 per cent equity in Canara Bank, in excess of 59 per cent n Punjab National Bank, in Bank of Baroda, the government holds 57.5 per cent, in Allahabad Bank over 60 per cent, 61 per cent in Andhra Bank, 64.4 per cent in Bank of India and 81.5 per cent in Central Bank of India.

The CNX Nifty is currently trading at 7699.55, down by 96.15 points or 1.23% after trading in a range of 7691.20 and 7728.35. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were Infosys up by 0.86%, Coal India up by 0.78%, TCS up by 0.62%, Zee Entertainment up by 0.35% and HCL Tech. up by 0.25%. On the flip side, Vedanta down by 6.20%, ICICI Bank down by 3.66%, Adani Ports &Special down by 3.63%, Hindalco down by 3.47% and Tata Steel down by 3.37% were the top losers.

Asian markets were trading mostly in red, Hang Seng was down by 3.51%, Nikkei 225 decreased down by 4.06%, Shanghai Composite down by 1.95%, Jakarta Composite down by 0.79%, Straits Times down by 1.77% and FTSE Bursa Malaysia KLCI down by 0.59%. On the flip side, Taiwan Weighted was up by 0.11%.