Benchmarks add losses; Nifty slips below 8350 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 90 points and Nifty falling below the 8350 level, as investors booked profits in recent gainers amid a weak trend in global markets. Besides, market participants are also keenly awaiting the announcement of Cabinet expansion later today. According to reports, the appointment of new ministers is to ensure the delivery of promises the government made in its Budgets and the election manifesto. Sentiments remained subdued with a private report stating that investments in projects remained elusive in the first quarter of the financial year 2016-17 with stalled projects running into an estimated Rs 11.2 lakh crore. The report has further said that most of the stalled projects are in the electricity (31%) and steel (25%) sectors. However, losses remained capped with the report that the RBI has achieved its desired 'neutral' liquidity in the first quarter itself, mainly on account of Rs 80,000 crore OMO (open market operation) purchases in the past three months and a reduction in cash in circulation in June 2016. Further on monsoon front, with the Monday's rainfall of 14.8 mm, which was 74% higher than normal, the country’s seasonal rainfall deficit contracted to 2% from 6% in a day on Monday.  The weather office has forecast heavy showers in Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Bihar and other parts of east in the next 24 hours. This could speed up planting of paddy, oilseeds, coarse cereals, cotton, sugarcane and pulses.

On the global front, Asian stocks retreated on Tuesday following declines in European shares as an element of concern crept back into trading after last week’s post-Brexit vote rebound. Japan's Nikkei share average declined, snapping a six-day winning streak after a stronger yen triggered profit taking, while banking stocks underperformed on fears of counterparty risks following a drop in European banks. However, shares in China bucked a slump across Asia, as Chinese investors became more hopeful about President Xi Jinping’s calls for state-owned enterprise reform. Back home, stocks from Metal, PSU and Realty counters were supporting the market, while those from Auto, IT and Oil & Gas counters were adding to the underlying cautious undertone. In scrip specific development, shares of Elantas Beck India surged after the company received an approval for sale of its property (approximately 6,239 square meter) located at Mumbai-Pune Road, Pimpri Waghere, Pune to Sukhwani Associates. Moreover, Techno Electric & Engineering Company rallied after the company announced that the board will meet on July 14 to consider issue of bonus shares.

The market breadth remained pessimistic as there were 1057 shares on the gaining side against 1091 shares on the losing side, while 109 shares remained unchanged.

The BSE Sensex is currently trading at 27188.65, down by 90.11 points or 0.33% after trading in a range of 27173.79 and 27348.66. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.05%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Metal up by 0.58%, PSU up by 0.34%, Realty up by 0.12%, Consumer Durables up by 0.10% and Capital Goods up by 0.05%, while Auto down by 0.62%, TECK down by 0.39%, IT down by 0.34%, Oil & Gas down by 0.32% and Bankex down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 0.97%, Coal India up by 0.65%, Adani Ports &Special up by 0.59%, SBI up by 0.43% and Dr. Reddys Lab up by 0.26%. On the flip side, Bajaj Auto down by 1.37%, GAIL India down by 1.26%, NTPC down by 1.22%, Bharti Airtel down by 1.22% and Tata Motors down by 1.12% were the top losers.

Meanwhile, Banks will be getting their first tranche of the capital infusion, as the government has finalised about Rs 18,000 crore of fund infusion, which is almost 75% of the Rs 25,000 crore allocated in this year's budget for capital infusion. About 15 of the country's 27 public sector banks are expected to get capital in the first tranche and the second tranche of capital infusion will be done by the end of March 2017 after assessing the performance of lenders. The PSU banks cumulatively suffered losses of Rs 18,000 crore in the last fiscal, mainly on account of higher provisioning for bad loans so the government has finalised plan for the first round of capital infusion for state-run banks in the current financial year to bolster their capital.

Finance Minister Arun Jaitley during the budget had reiterated that the government will provide additional capital if required by banks and will find the resources for doing so. As per Finance ministry estimates public sector banks will require Rs 1.8 lakh crore of additional capital in the next four financial years, of which Rs 1.1 lakh crore will have to be raised from the market and through the sale of non-core assets.

In line with the blueprint, PSU banks will get Rs 25,000 crore this fiscal, besides, Rs 10,000 crore would be infused in 2017-18 and 2018-19 each. During the last fiscal, 21 public sectors banks got fund support of Rs 25,000 crore. Of this, SBI got the highest amount of Rs 5,393 crore followed by Bank of India at Rs 2,455 crore.

The CNX Nifty is currently trading at 8343.20, down by 27.50 points or 0.33% after trading in a range of 8336.10 and 8381.45. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were BHEL up by 1.81%, Zee Entertainment up by 1.23%, Tata Steel up by 0.97%, Yes Bank up by 0.69% and Ambuja Cement up by 0.61%. On the flip side, NTPC down by 1.54%, GAIL India down by 1.46%, Bajaj Auto down by 1.46%, Bharti Airtel down by 1.31% and HCL Tech down by 1.24% were the top losers.

Asian markets were trading mostly in red barring the Shanghai Composite, which was up by 0.52%. On the other hand, Hang Seng declined by 0.76%, Nikkei 225 lost 0.9%, Taiwan Weighted declined by 0.51%, Jakarta Composite was lower by 0.9%, KOSPI Index decreased by 0.31% and FTSE Bursa Malaysia KLCI was down by 0.25%.