Markets slip into negative territory; banking stocks drag

Following a positive start, Indian equity markets retreated and slipped into the negative territory in the late morning session amid mild profit booking. The Sensex was down 37 points, while the Nifty fell by 7 points. Investors were trading cautiously, expecting rate cut in the upcoming monetary policy of the RBI. In currency markets, rupee recovered against greenback on Friday amid dollar selling by banks and exporters. On sectoral front, banking stocks were dragging the markets down after the Cobrapost expose. Meanwhile, the Finance Ministry and Reserve Bank of India are investigating allegations of money laundering practices at top private sector lenders ICICI Bank, HDFC Bank and Axis Bank. Metal and healthcare stocks were off their highs as well. Information technology stocks, which opened on a subdued note, have edged higher and consumer durables stocks have retreated slightly from their earlier highs.

On the global front, most Asian markets were trading in green after three days of losses as global risk sentiment was improved by new US data overnight suggesting a steady recovery in the world's largest economy. Back home, the market breadth favoring negative trend; there were 1076 shares on the gaining side against 1261 shares on the losing side while 135 shares remain unchanged.

The BSE Sensex is currently trading at 19533.39, down by 37.05 points or 0.19% after trading in a range of 19673.16 and 19489.02. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.11%, while the Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.54%, IT up by 0.72%, Health Care up by 0.57%, TECk up by 0.54% and FMCG up by 0.28% while, Bankex down by 1.15%, Realty down by 1.09%, Auto down by 0.46% and Oil & Gas down by 0.21% were the top losers on the BSE.

The top gainers on the Sensex were Hindalco Industries up by 1.41%, Hindustan Unilever up by 1.24%, Cipla up by 1.05%, HDFC up by 0.89% and Infosys up by 0.87%.

On the flip side, ICICI Bank was down by 3.22%, Tata Motors was down by 2.14%, HDFC Bank was down by 1.17%, GAIL India was down by 1.11% and Maruti Suzuki was down by 1.10% were the top losers on the Sensex.

Meanwhile, with marginal improvement seen in industrial output and exports, the Commerce Minister Anand Sharma has said that the worst is over for the economy and along with others has also pitched for lower interest rates to spur investments. The Reserve Bank of India (RBI) is slated to review the monetary policy on March 19.

Sharma said, ‘we do hope that the downturn that we have seen has bottomed out, hope that next year will be different from last year. We will see more foreign direct investment coming... we feel our exports will definitely grow and GDP will grow above 6% in FY 2013-14.

However, on rising inflation numbers, Sharma said, it remained a matter of concern, though non-food inflation has moderated and said, the government is in favour of the industry getting access to cheap credit. However, the apex bank has the autonomy to take its decisions, but the need of the economy is more investments and dollar credit window.

The Indian Inc for long has been demanding a cut in repo rate to help revive India's sagging GDP growth that hit decade's low of 4.5% in the third quarter of 2012-13.      The CNX Nifty is currently trading at 5,901.55 up by 7.40 points or 0.13% after trading in a range of 5,945.65 and 5,890.65. There were 30 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were Siemens up by 4.60%, Asian Paints up by 2.22%, Ultra Tech Cement up by 1.64%, BPCL up by 1.50% and Hindalco up by 1.35%.

On the flip side, ICICI Bank down by 3.30%, DLF down by 2.95%, Tata Motors down by 1.94%, HDFC Bank down by 1.26% and Reliance Infra down by 1.06%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite surged 1.10%, Hang Seng strengthened 0.49%, Jakarta Composite soared 1.20%, Nikkei 225 jumped 1.25% and Straits Times added 0.69%.

On the flip side, KLSE Composite declined 0.48%, KOSPI Composite was down by 0.58% and Taiwan Weighted was down by 0.31%.