Markets make weak opening amid feeble global cues

Indian equity benchmarks have made a weak start and are trading lower with a cut of over a quarter percent, as traders booked some profits after four days of rally. Further, weakness in the other Asian peers too weighed on the sentiments. Besides, the Indian rupee depreciating 10 paise to 66.52 against the US Dollar in early trade on Friday at the Interbank Foreign Exchange too pressured the markets. However, losses remained capped with the Finance Ministry stating that India is well prepared to deal with the impact of the US Federal Reserve interest rate hike and the end of uncertainties will actually help policy makers in emerging economies. On the sectoral front, traders were seen piling up position in Realty, FMCG, Capital Goods, Consumer Durables and PSU, while selling was witnessed in IT, TECK, Auto, Bank and Oil & Gas.

In the scrip specific development, Somany Ceramics dropped 8% on the National Stock Exchange (NSE) after the company set the floor price of Rs 357.24 per share for qualified institutional placement (QIP) issue.

On the global front, the US stocks ended lower as oil prices posted their lowest settlement in nearly seven years. Asian markets were trading mostly in red, tracking the weak cues overnight from Wall Street as the euphoria over the US Federal Reserve's first interest rate increase since 2006 faded and as commodity prices resumed their downward slide.

Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,800 and 25,700 levels respectively.  The market breadth on BSE was positive in the ratio of 958: 627 while 100 scrips remained unchanged

The BSE Sensex is currently trading at 25721.83, down by 81.95 points or 0.32% after trading in a range of 25703.01 and 25789.51. 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 0.28%, while Small cap index added 0.19%.

The top gaining sectoral indices on the BSE were Realty up by 0.54%, FMCG up by 0.53%, Capital Goods up by 0.42%, Consumer Durables up by 0.40% and PSU up by 0.19%, while IT down by 0.88%, TECK down by 0.65%, Auto down by 0.23%, Bankex down by 0.08% and Oil & Gas down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.06%, Hindustan Unilever up by 0.83%, NTPC up by 0.81%, Hindalco up by 0.80% and Larsen & Toubro up by 0.62%. On the flip side, Infosys down by 1.25%, TCS down by 1.20%, Bajaj Auto down by 1.16%, Vedanta down by 0.98% and BHEL down by 0.68% were the top losers.

Meanwhile, the Reserve Bank of India (RBI), in order to improve transparency and ensure speedier monetary policy transmission has said that all banks will have to follow a new uniform methodology from the next fiscal (April 1, 2016) for calculation of base rate on the basis of the marginal cost of funds. The apex bank stated that marginal cost pricing of loans will help the banks become more competitive and enhance their long run value and contribution to economic growth.

The new lending rates, Marginal Cost of Funds-based Lending Rate (MCLR), will be computed based on banks' marginal cost of borrowing, or incremental cost of funds, rather than the average cost of funds that banks have used so far. Apart from helping improve the transmission of policy rates into the lending rates of banks, these measures are expected to improve transparency in the methodology followed by banks for determining interest rates on advances.

As per the RBI notifications, the MCLR will be a tenor linked internal benchmark and the actual lending rates will be determined by adding the components of spread to the MCLR. Banks will have to review and publish their MCLR of different maturities every month on a pre-announced date. If a bank's cost of borrowing is eight per cent now but tomorrow the incremental cost of funds becomes 7.5 per cent, the marginal cost of borrowing for the computation purpose will be 7.5 per cent, rather than the average of the two as was previously being used.

Banks will have the option to offer loans with reset dates linked either to the date of sanction of the loan/credit limits or to the date of review of MCLR. The periodicity of reset shall be one year or lower. RBI has further said that the MCLR prevailing on the day the loan is sanctioned will be applicable till the next reset date, irrespective of the changes in the benchmark during the interim period. It also said that existing loans and credit limits linked to the Base Rate may continue till repayment or renewal, as the case may be. Existing borrowers will also have the option to move to the Marginal Cost of Funds based Lending Rate (MCLR) linked loan at mutually acceptable terms.

The CNX Nifty is currently trading at 7823.35, down by 21.00 points or 0.27% after trading in a range of 7809.25 and 7836.15. There were 20 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 0.87%, Axis Bank up by 0.73%, NTPC up by 0.66%, Hindalco up by 0.62% and GAIL India up by 0.60%. On the flip side, Tech Mahindra down by 1.36%, Infosys down by 1.24%, TCS down by 1.13%, Bajaj Auto down by 1.13% and Vedanta down by 1.09% were the top losers

Asian markets were trading mostly in red, Jakarta Composite decreased 67.3 points or 1.48% to 4,488.66, Taiwan Weighted decreased 46.98 points or 0.56% to 8,272.69, Nikkei 225 decreased 46.5 points or 0.24% to 19,307.06, Hang Seng decreased 40.09 points or 0.18% to 21,831.97, FTSE Bursa Malaysia KLCI decreased 8.57 points or 0.52% to 1,647.95 and Shanghai Composite decreased 0.66 points or 0.02% to 3,579.34.

On the flip side, KOSPI Index increased 2.04 points or 0.1% to 1,980.00.