Benchmarks make pessimistic start; Sensex slips below 39,800 mark

Indian equity benchmarks made a pessimistic start and are trading with cut of over one third of a percent in early deals with frontline gauges declining below their crucial 39,800 (Sensex) and 11,950 (Nifty) levels, as traders remained on sidelines ahead of macro-economic data. Retail inflation and industrial production data for May and April, respectively, due to be released later in the day. There is expectation that retail inflation likely accelerated to a seven-month high in May on rising food prices. However, losses remain capped with the Reserve Bank of India’s (RBI) statement that it will infuse Rs 15,000 crore into the financial system through bond purchases on June 13. 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 (six) Government securities under OMOs through multi-security auction using the multiple price method.

On the global front, most of the Asian markets are trading in red at this point of time as US-China trade issue remained unresolved and ahead of key economic data from China. The US markets ended marginally lower on Tuesday as investors wavered between fears of rising trade tensions and hopes that policy makers will bolster markets with fresh stimulus measures.

Back home, metal stocks remained in focus with report that the Steel Ministry has suggested its commerce counterpart to bring certain changes in norms used for imposing anti-dumping duties with a view to making them more effective for protecting domestic players from cheap imports. In scrip specific developments, DHFL gained on making full payment of pending interest on NCDs. Welspun Enterprises edged higher as its arm received bonus from NHAI for early completion of project.

The BSE Sensex is currently trading at 39794.60, down by 155.86 points or 0.39% after trading in a range of 39774.33 and 39982.10. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.15%, while Small cap index was down by 0.11%.

The top gaining sectoral indices on the BSE were Metal up by 0.85%, Utilities up by 0.37%, Energy up by 0.27%, Oil & Gas up by 0.24% and Power was up by 0.18%, while Telecom down by 1.03%, TECK down by 0.75%, IT down by 0.72%, Bankex down by 0.56% and Realty was down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 1.62%, Sun Pharma up by 1.28%, Tata Steel up by 1.27%, Indusind Bank up by 0.54% and Reliance Industries up by 0.48%. On the flip side, Yes Bank down by 2.58%, Bajaj Auto down by 1.55%, TCS down by 1.09%, Kotak Mahindra Bank down by 1.06% and Bharti Airtel down by 1.05% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has said that it will infuse Rs 15,000 crore into the financial system through bond purchases on June 13, with a view of evolving liquidity situation in the market. It has decided to conduct purchase of (six) Government securities under open market operations (OMOs) through multi-security auction using the multiple price method. It has decided the same based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward.

The central bank further said there is an overall aggregate ceiling of Rs 15,000 crore for all the securities in the basket put together and there is no security-wise notified amount. The participants have to submit their offers in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system.

The result of the auction will be announced on the same day and payment to successful participants will be made on the following day. The RBI uses OMO for injecting liquidity into the system through the purchase of government bonds (G-sec). The sale or buying of G-secs infuses or reduces liquidity.

The CNX Nifty is currently trading at 11922.40, down by 43.20 points or 0.36% after trading in a range of 11913.60 and 11962.45. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 1.56%, GAIL India up by 1.44%, Tata Steel up by 1.40%, Sun Pharma up by 1.19% and JSW Steel up by 0.80%. On the flip side, Indiabulls Housing down by 5.18%, Yes Bank down by 2.72%, Bajaj Auto down by 1.54%, Bharti Infratel down by 1.34% and TCS down by 1.07% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 440.82 points or 1.59% to 27,348.52, Taiwan Weighted slipped 7.52 points or 0.07% to 10,600.24, Nikkei 225 slipped 1.57 points or 0.01% to 21,202.71, KOSPI shed 4.23 points or 0.20% to 2,107.58, Jakarta Composite decreased 30.43 points or 0.48% to 6,275.56 and Shanghai Composite was down by 16.65 points or 0.57% to 2,909.07. On the flip side, Straits Times was up by 5.60 points or 0.17% to 3,215.18.