Weakness persist in markets amid profit taking

Indian equity markets extended early losses and continued trading in negative territory due to lack of prominent triggers. In currency markets rupee touched one-month low against the US dollar on Friday amid increasing demand for the greenback from importers. On sectoral front, Power, oil and capital goods stocks were mostly trading weak. Shares from metal sector too were struggling to find support. Pharmaceutical stocks were finding modest support. IT and realty stocks are trading mixed, while consumer durables stocks were moving higher. Meanwhile, shares of Indian Hotels dropped over 5% on the back of the unsolicited $1.2 billion bid the firm announced for Orient-Express Hotels. In global markets, Asian stocks were mixed on Friday as disappointing US corporate earnings hurt sentiment and provided a reason to book profits on recent gains. Back home, the market breadth favoring positive trend; there were 1,353 shares on the gaining side against 1,116 shares on the losing side while 121 shares remain unchanged.

The BSE Sensex is currently trading at 18,728.19 down by 63.74 points or 0.34% after trading in a range of 18,769.59 and 18,706.82. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.20% and Small cap index was up by 0.40%.

The top gainers on the BSE sectoral space were, CD up by 1.28%, IT up by 0.12%, Realty up 0.11% and Health Care (HC) up by 0.04%. While, Oil & Gas down by 0.69%, Power down by 0.44%, Metal down by 0.43%, PSU down by 0.30% and CG down by 0.24%, were the top losers on sectoral space.

The top gainers on the Sensex were Bajaj Auto up by 1.15%, Dr Reddy’s Lab up by 0.84%, Wipro up by 0.65%, Infosys up by 0.46% and Tata Motors up by 0.30%. On the other hand, Gail India down by 1.48%, Sun Pharma down by 1.41%, Jindal Steel down by 1.28%, Hindalco down by 1.10% and HUL down by 1.07% were the top losers on the Sensex.   

Meanwhile, with an attempt to make the banking industry more competitive, Chairman of Prime Minister's Economic Advisory Council C Rangarajan has urged Reserve Bank to come up with entry norms for issuing new banking licenses. He pointed out that periodic entry of new banks is inevitable to ensure competitiveness in the domestic banking system, as closed system can only make an oligopolistic market.

The former RBI governor cautioned that such situations have to be avoided, and proposed the central bank to set up criteria for new entrants. He has urged that the decision to allow new entrants should be taken by considering the economic needs over the next several decades, for ensuring the sector’s competency.

The apex bank, which had issued draft norms for new banks last year, is yet to come up with the final guidelines as it sought statutory powers to supersede the boards of erring banks, which can happen only through an amendment to the Banking Regulations Act, pending before Parliament.

Rangarajan also affirmed that new capital adequacy regulations such as Basel III is necessary in the long term prospects, and indicated that the RBI's projection on Basel-III capital requirement in its annual report is an underestimate.

While, the RBI Governor in the financial stability report released in August had pegged the capital need of banks at about Rs 1.75 trillion by March 2018 to conform to Basel III.  He also blamed economic slowdown for the rising NPAs.

The S&P CNX Nifty is currently trading at 5,700.95, down by 17.75 points or 0.31% after trading in a range of 5,711.70 and 5,692.85. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were IDFC up by 2.06%, Ambuja Cement up by 1.85%, DLF up by 1.46, Lupin up by 1.17% and Bajaj-Auto up by 1.10%. While, Sun Pharma down by 1.55%, BPCL down by 1.31%, GAIL down by 1.30%, Jindal Steel down by 1.20% and HUL down by 1.09% were top losers on the index.

Asian equity indices were trading mixed; Taiwan Weighted down by 0.76%, Kospi Composite was down by 0.78%, Jakarta Composite down by 0.43%, Straits Times was down by 0.33% while Shanghai Composite was up by 0.10%, Hang Seng was up by 0.20%, KLSE Composite was up by 0.20%, Nikkei 225 was up by 0.22% were the gainers.