Benchmarks slip to intra-day’s low level; key earnings’ eyed

Benchmark equity indices dipping to intra-day’s low level are simply managing to hold in green, tracing the cautious start of European counterparts. Shunning the early optimism, market-participants have resorted to profit-booking on account of Rupee’s weakness. Increased demand of dollar from importers amidst greenback’s strength in overseas market is weighing on the local unit, overriding the central bank's attempt to stamp down on speculation. Near day’s low, benchmark indexes, Sensex and Nifty, are trading above 19950 and 5950 levels respectively,  while broader indices have slipped into negative territory.

Meanwhile, on the global front, European markets have got off to a mixed start, with investors seen avoiding strong bets ahead of major company results, a day after the world's biggest chipmaker Intel cut its full-year revenue forecast.

Closer home, prevailing caution ahead of big corporate earnings, viz, TCS, Axis Bank and IDBI Bank, has sapped the bourses gain. On the BSE sectoral front, stocks from Bankex, Auto and Metal counters are the major pockets of weakness, while those from Capital Goods, Health Care and Realty space are slogging to limit the downtrend of the markets. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1092:914; while 134 shares remained unchanged.

The BSE Sensex is currently trading at 19972.11, up by 23.38 points or 0.12% after trading in a range of 20059.03 and 19956.20. The broader indices too have slipped in red; the BSE Mid cap and Small cap indices were trading lower by 0.03% each.

The top gaining sectoral indices on the BSE were, Capital Goods up by 0.97%, Health Care up by 0.95%, Realty up by 0.80%, Oil & Gas up by 0.79% and Consumer Durables up by 0.49%, while Bankex down by 0.88%, Auto down by 0.39% and Metal down by 0.31%, Power down by 0.03% were the top losers on the index.

Out of the 30 shares on Sensex, 17 stocks were advancing while 13 were declining. The top gainers on the Sensex were ONGC up by 3.42%, Hindalco Industries up by 2.65%, BHEL up by 2.40%, Infosys up by 1.81% and Cipla up by 1.78%. On the flip side, ICICI Bank down by 2.42%, Mahindra & Mahindra down by 2.36%, Sterlite Industries down by 2.01%, NTPC down by 1.83% and TCS was down by 1.09% were the top losers on the Sensex.

Meanwhile, Chief Economic Advisor Raghuram Rajan has called for zero regulation, saying that external factors and the delayed allocation of natural resources and environmental clearances have played a significant role in the slowdown of growth. He also said that undue volatility in the rupee is not desirable.

Rajan highlighted that the Reserve Bank of India’s (RBI) measures were not an indication of a tightening in the interest rate cycle which has increased the cost of funds for banks and did not signal monetary tightening, a short-term move with an intention to curb rupee volatility. Stating further he said that he saw no comparison between sliding macroeconomic parameters and global financial crisis, even as the RBI opened a three-day repo borrowing window for mutual funds for the first time after the meltdown of 2008-09.

He also stated that as policy rates were left unchanged, the RBI steps cannot be called a monetary tightening measure. “It did not change the policy rate, not changed the repo rate. I think the message that the Reserve Bank was trying to send out that it is not the beginning of a process of monetary tightening.”  He also said that if the inflation comes under control, the RBI may reduce the rates.

Earlier, after lifting short term rates to drain out liquidity, the RBI, as a contingency measure, to enable banks to fulfill Mutual Funds liquidity needs, decided to conduct a special 3-day repo borrowing window, under which banks can borrow Rs 25,000 crore at an interest rate of 10.25%. This facility has been made available for a temporary period until further notice.

The CNX Nifty is currently trading at 5,979.95, up by 6.65 points or 0.11% after trading in a range of 6,005.60 and 5,974.55.

Out of the 50 shares on Nifty, 29 stocks were gaining, while 21 stocks were losing. Top gainers of the Nifty were ONGC up by 3.59%, Hindalco Industries up by 2.94%, BHEL up by 2.84%, Asian Paint up by 2.62% and Lupin up by 2.29%. On the flip side, ICICI Bank down by 2.50%, Axis Bank down by 2.49% M&M down by 2.37%, Kotak Bank down by 2.35%, and HCL Tech down by 1.87% were the major losers on the index.

The Asian equity indices were trading on mixed; Jakarta Composite increased 0.60%, KLSE Composite jumped 0.07%, Nikkei 225 surged 1.32% and Straits Times was up by 0.26%. On the flip side, Hang Seng down by 0.16%, Shanghai Composite declined 1.01%, Seoul Composite contracted 0.64% and Taiwan Weighted was down by 0.78%.

European markets have got off to a mixed start; with CAC 40 losing 0.03%, DAX  edging lower 0.09% and FTSE 100 gainning 0.21%.