Sensex, Nifty trims early gains despite RBI slashing CRR by 25bps

Indian equity markets trimmed some early gains despite the Reserve Bank of India (RBI) slashing cash reserve ratio by 25 basis points to 4.5%, as market seemed to be expecting more than what the RBI delivered today. The NSE Nifty erased gains quite drastically after RBI reduced the CRR and kept repo and reverse repo unchanged. Even the bond yields, which rallied quite sharply just before the announcement on high expectations, saw major correction. In currency markets, Indian rupee traded higher against dollar on Monday cheering on hopes of major foreign inflows as government announced the opening up of the aviation and multi-brand retail sectors to more overseas investment. On sectoral front, most rate sensitive sectors like realty and bankex were trading strong on RBI’s move, while FMCG, IT and health care sectors were trading in red. In global markets, Asian shares traded mixed in late morning session on Monday following strong advances at the end of last week on the back of Federal Reserve’s huge stimulus plan to boost the US economy. Back home, the market breadth favoring positive trend; there were 1,459 shares on the gaining side against 1,055 shares on the losing side while 119 shares remained unchanged.

The BSE Sensex is currently trading at 18,569.55 up by 105.28 points or 0.57% after touching a high and low of 18715.03 and 18,516.04, respectively. There were 18 stocks advancing against 12 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.64% and Small cap index was up by 0.74%.

The top gainers on the BSE sectoral space were, Realty up by 4.65%, CG up by 2.57%, Bankex up by 2.32%, Oil &Gas up by 1.75% and Auto up by 1.72%. While IT down by 2.35%, FMCG down by 2.06%, TECk down by 1.50% and HC down by 1.48% were top losers on the index.

The top gainers on the Sensex were ICICI Bank up by 4.38%, Jindal Steel up by 3.98%, Tata Motors up by 3.55%, L&T up by 3.43% and Maruti Suzuki up by 3.26%. On the flip side, ITC down by 3.58%, TCS down by 2.82%, Dr Reddys Lab down by 2.65%, Infosys down by 2.40% and Wipro down by 1.47% were top losers on the Sensex. 

 Meanwhile, following the diesel price hike by Rs 5.63 per litre, aviation turbine fuel (ATF), or jet fuel was raised by about 2% to Rs 73,711 per kilolitre on Sept 15 - the biggest ever hike in rates effected from beginning of this month. Further, according to Indian Oil Corporation (IOC), ATF at T3 terminal in Delhi has been increased by Rs 1,429/ kl, or 1.97% to Rs 73,711/ kl.

Since July, this is the fifth straight increase in rates, jet fuel adds up to over 40% of an airline's operating costs and the increase in prices will add to the burden of cash-strapped airlines. The prices were increased mainly on the back of firming international oil rates and dip in rupee value against the US dollar.

The three fuel retailers i.e. Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) normally modify their  jet fuel prices on the 1st & 16th of every month, based on the average international price in the previous fortnight.

The S&P CNX Nifty is currently trading at 5,611.90, up by 34.25 points or 0.61% after trading in a range of 5,652.20 and 5,592.85. There were 30 stocks advancing against 20 declines on the index.

The major gainers of the Nifty were Reliance Infra up by 5.86%, JP Associates up by 5.43%, IDFC up by 5.22%, DLF up by 4.94% and ICICI Bank up by 4.34%. On the flip side, ITC down by 3.39%, TCS down by 2.92%, Dr Reddy down by 2.72%, HCL Tech down by 2.72% and Ranbaxy down by 2.44% were major losers on the index.

Most of the Asian indices were trading in green; Jakarta Composite up by 0.10%, Hang Seng index up by 0.10%, Taiwan Weighted up by 0.31% and Straits Times up by 0.33% while Shanghai Composite down by 1.18% and Kospi Composite Index down by 0.12% were the losers.

The Japanese market is closed today on account of a public holiday on ‘Respect for the Aged Day’, while the Malaysian market is closed on account of Malaysia Day public holiday.