Local equities turn flat in morning deals

Local equity benchmarks trimmed most of their gains in the morning session to trade flat. Both Sensex and Nifty were trading below their crucial 37,600 and 11,300 marks, respectively. Sentiments turned pessimistic as former RBI governor Raghuram Rajan warned that capitalism is under ‘serious threat’ of a ‘revolt’ as the economic and political system has stopped providing for the people, especially after the 2008 global financial meltdown. Some pessimism also spread among the investors as Industrial growth slipped in January, failing to build on modest recovery in the month before, while consumer inflation inched up in February though remaining well below the central bank’s target, strengthening the case for another rate cut in the next monetary policy review. India’s retail inflation based on Consumer Price Index (CPI) surged to 2.57% in the month of February 2019 higher from 1.97% posted in January 2019, but lower compared to 4.44% in the same month of previous year. The earlier lowest inflation was 2.33% in November 2018.

On the global front, Asian markets were trading mostly in red, amid fresh global uncertainties after UK lawmakers again rejected the terms of a deal for Britain to withdraw from the European Union. Back home, in scrip specific developments, Kalpataru Power Transmission soared on completing acquisition of additional stake in SSLL and Bajaj Finance edged higher on reporting over 5-fold jump in fixed deposit book in last 3 years.

The BSE Sensex is currently trading at 37570.87, up by 35.21 points or 0.09% after trading in a range of 37478.87 and 37703.49. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.32%, while Small cap index was down by 0.33%.

The gaining sectoral indices on the BSE were Realty up by 0.76%, IT up by 0.66%, TECK up by 0.32%, FMCG up by 0.22%, BANKEX was up by 0.19%, while Metal down by 1.95%, Telecom down by 1.50%, PSU down by 1.20%, Power down by 1.20% and Oil & Gas was down by 1.15% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 1.60%, IndusInd Bank up by 1.44%, Infosys up by 1.40%, HDFC Bank up by 1.19% and Bajaj Finance was up by 0.91%. On the flip side, Vedanta down by 2.81%, NTPC down by 2.61%, ONGC down by 2.14%, Tata Motors - DVR down by 2.09% and Coal India was down by 1.94% were the top losers.

Meanwhile, in order to increase liquidity into the market, the Reserve Bank of India (RBI) is going to infuse Rs 12,500 crore into the system through open market operations on March 14, 2019. Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of the government securities under open market operations (OMOs).

The RBI stated that the purchase would happen through multi-security auction using the multiple price method. There is an overall aggregate ceiling of Rs 12,500 crore for all the securities in the basket put together. There is no security-wise notified amount.

Further, the RBI said it reserves the right to decide on the quantum of purchase of individual securities and accept offers for less than the aggregate amount of Rs 12,500 crore or purchase marginally higher than the aggregate amount due to rounding-off effects. It can also accept or reject any or all the offers either wholly or partially without assigning any reason.

OMOs are money market tools to infuse or suck out liquidity from the system. Where there is liquidity surplus, it sells securities to suck out money, while the reverse happens when there is a liquidity crunch in the system.

The CNX Nifty is currently trading at 11297.30, down by 3.90 points or 0.03% after trading in a range of 11276.60 and 11342.10. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 1.64%, IndusInd Bank up by 1.57%, Infosys up by 1.50%, HDFC Bank up by 1.27% and Dr. Reddy’s Lab was up by 1.09%. On the flip side, Indian Oil Corporation down by 3.28%, Vedanta down by 3.08%, JSW Steel down by 2.88%, NTPC down by 2.61% and Coal India was down by 2.33% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 275.10 points or 1.28% to 21,228.59, Hang Seng decreased 187.63 points or 0.65% to 28,733.24, Straits Times trembled 24.14 points or 0.75% to 3,188.11, KOSPI fell 14.43 points or 0.67% to 2,142.75 and Shanghai Composite was down by 11.30 points or 0.37% to 3,049.01.

On the other hand; Jakarta Composite soared 3.97 points or 0.06% to 6,357.74 and Taiwan Weighted strengthened 25.18 points or 0.24% to 10,368.51.