Benchmarks end a lackluster session marginally in red

Indian stock markets prolonged the lull for the second consecutive day and finished the session mildly in red, as market participant adopted cautious approach ahead of the central bank’s decision on policy rates and with a number of global risk events scheduled for later this month, including a US Federal Reserve meeting and the “Brexit” referendum. Further, with crude oil price touching 7-month high of $ 50 a barrel, Finance Minister Arun Jaitley has said India can handle the current level but higher rates will impact the economy and lead to inflationary pressure. India, which depends on imports to meet 80 per cent of its oil needs, will have to spend Rs 9,126 crore more for every dollar per barrel increase in crude oil prices while also see surge in inflation.  However, investors got some encouragement with the report that India has jumped 13 positions from last year to rank second among 30 developing countries this year on ease of doing business. According to 2016 Global Retail Development Index (GRDI), which ranks top 30 developing countries for retail investment worldwide, a pickup in GDP growth and better clarity regarding FDI regulations have helped India achieve a second ranking. Appreciation in the rupee too provided some support to domestic markets. Indian rupee strengthened by 30 paise to 66.95 against the US dollar at the time of equity markets closing on increased selling of the American currency by exporters amid foreign fund inflows. Meanwhile, Telecom stocks took a hit after Reliance Jio started taking registrations from interested people for network trials, indicating that a launch may be around the corner, while sugar companies gained after the private report that stated the profitability trend for domestic sugar mills is likely to be better during the crushing season 2015-16 on supply correction.

On the global front, Asian markets ended mostly higher on Monday as emerging markets rallied after a weaker US employment report spurred speculation the Federal Reserve will delay raising interest rates.  Data from the Labor Department showed that US employment edged up by just 38,000 jobs in May compared to estimates for an increase of about 158,000 jobs, reflecting the smallest increase in employment in more than five years. However, Japanese shares hit four-week low as the dollar slid to a one-month low against the yen on the back of weaker-than-expected US jobs data, adding pressure on the outlook for Japanese exporters. Meanwhile, European stocks rose in early trade, as gains in the shares of major mining and oil companies propped up the region’s markets, which had fallen at the end of last week.

Back home, after getting cautious start, the local benchmark indices traded in tight range near neutral line for most part of the session, as investors and traders adopted a cautious approach, ahead of the RBI's bi-monthly monetary policy review on Tuesday. Even through some mild selling was witnessed in late afternoon session; the indices recovered most of their losses by the end of the session. Finally, the NSE’s 50-share broadly followed index - Nifty settled with minor loss of nineteen points above the psychological 8,200 levels, while Bombay Stock Exchange’s Sensitive Index - Sensex shed sixty five points but managed to close above the psychological 26,750 mark. On the BSE sectoral space, Consumer Durables and Teck pockets remained among top laggards in the space as they got lacerated by 1.39% and 0.54% respectively. While sectors like IT, Oil & Gas and PSU too got pounded in the session. On the flipside, the high beta sectors like Realty and Capital Goods managed to go home with moderate gains of around half a percent. The market breadth remained pessimistic as there were 1177 shares on the gaining side against 1461 shares on the losing side, while 133 shares remained unchanged.

Finally, the BSE Sensex ended lower by 65.58 points or 0.24% to 26777.45, while the CNX Nifty dropped 19.75 points or 0.24% to 8,201.05.

The BSE Sensex touched a high and a low 26901.42 and 26729.54, respectively. The broader indices made a mixed closing; the BSE Mid cap index ended down by 0.09%, while Small cap index gained 0.22%.

The top gaining sectoral indices on the BSE were Realty up by 0.80%, Capital Goods up by 0.47%, Auto up by 0.10% and FMCG up by 0.01%, while Consumer Durables down by 1.39%, TECK down by 0.54%, Oil & Gas down by 0.54%, IT down by 0.33% and PSU down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.51%, SBI up by 1.30%, GAIL India up by 1.24%, Mahindra & Mahindra up by 1.19% and Cipla up by 0.55%. On the flip side, Bharti Airtel down by 2.62%, Lupin down by 2.08%, Maruti Suzuki down by 2.01%, Sun Pharma down by 1.67% and Axis Bank down by 1.60% were the top losers.

Meanwhile, with an aim to take their relationship to new heights, India and Qatar have signed seven agreements including one to check money laundering and another on terrorism financing, and decided to move beyond the trading relationship and get into strategic investments by signing a pact to woo foreign investment in the infrastructure sector too.

A MoU was signed between the Finance Intelligence Unit-India (FIU) and Qatar Financial Information Unit (QFIU) to share intelligence on illegal movement of money, termed as 'hawala'. Under this pact, the two sides agreed to exchange financial intelligence to combat terrorism financing and other economic offences. Besides, MoU was signed between Qatar Investment Authority and External Affairs Ministry for investment in National Investment and Infrastructure Fund (NIIF) between the two countries that would facilitate foreign investment from the gas-rich Gulf state.

Furthermore, an agreement was signed on cooperation and investment in areas of skill development and education, health, tourism and sports between the two countries. An agreement was also signed between the two countries on cooperation and mutual assistance in custom matters besides MoU on cooperation in tourism. Another MoU was signed on cooperation between India and Qatar in the field of health.

Talks were held between the Prime Minister Modi and Emir Sheikh Tamim Bin Hamad Al Thani for multi-sectoral partnership and strengthening of Indo-Qatar ties following which the agreements and Memorandums of Understanding (MoUs) were signed on the second day of the Prime Minister's visit to Qatar. The dignitaries also decided to constitute an inter-ministerial high-level joint committee to regularly review all bilateral matters, as well as regional and global issues of mutual interest.

The CNX Nifty traded in a range of 8,234.70 and 8,186.05. There were 23 stocks advancing against 28s stocks decliners on the index.

The top gainers on Nifty were Bank of Baroda up by 2.46%, Tata Motors up by 1.89%, Yes Bank up by 1.68%, Ultratech Cement up by 1.25% and Eicher Motors up by 1.13%. On the flip side, Bharti Airtel down by 2.67%, Lupin down by 2.42%, Bharti Infratel down by 2.22%, Tech Mahindra down by 2.13% and Sun Pharmaceuticals Industries down by 1.95% were the top losers.

European markets were trading in green; France’s CAC increased 6.06 points or 0.14% to 4,427.84, Germany’s DAX gained 28.71 points or 0.28% to 10,131.97 and UK’s FTSE 100 was up by 61.24 points or 0.99% to 6,270.87.

Asian equity markets ended mostly higher on Monday after fluctuating in early trade, in response to a shockingly weak US employment report as well as a disappointing report on the non-manufacturing sector. Data from the Labor Department showed that US employment edged up by just 38,000 jobs in May compared to economist estimates for an increase of about 158,000 jobs, reflecting the smallest increase in employment in more than five years. The job gains in March and April were also downwardly revised to 186,000 and 123,000, respectively, reflecting a net downward revision of 59,000 jobs. A separate report from the Institute for Supply Management showed that growth in US service sector activity slowed by much more than expected in May. Hong Kong shares reversed earlier losses and ended slightly higher on Monday, supported by gains in energy and materials shares as oil and metal prices rose. Chinese stocks closed a tad lower ahead of a flurry of data due this week and the upcoming Dragon Boat Festival holidays. Japanese shares hit four-week low as the dollar slid to a one-month low against the yen on the back of weaker-than-expected US jobs data, adding pressure on the outlook for Japanese exporters. Markets in South Korea remained closed for Memorial Day.