Markets continue weak trade ahead of RBI policy review

Indian equity markets continued to languish in the negative territory in the late morning session on Monday amid sustained selling pressures across counters and weak trend in the Asian region. The BSE Sensex was down by 102 points, while the Nifty was down by 34.75 points. Investors were waiting for the guidance from RBI’s policy review on Tuesday and FOMC statement on Wednesday. In currency market, rupee depreciated against greenback on the back of dollar demand from PSU Bank’s on behalf of oil importers. On sectoral front, FMCG, banking and capital goods sectors were trading lower on selling pressure. Realty, consumer durables and metal stocks too were trading weak. Only select information technology and automobile stocks have surged higher. Moreover, Jet Airways shares gained sharply ahead of Foreign Investment Promotion Board or FIPB’s meeting today in order to consider the Jet-Etihad deal. While, country's largest lender State Bank of India and its rival HDFC Bank trading lower ahead of RBI monetary policy review.

On the global front, Asian stock markets were trading weak with a flat lead from Wall Street and a lack of fresh triggers prompting investors to tread cautiously. Activity is mostly stock specific in the region with investors eyeing quarterly earnings reports and regional economic news. Back home, the market breadth was favoring the negative trend; there were 1085 shares on the losing side against 732 shares on the gaining side, while 81 shares remained unchanged.

The BSE Sensex is currently trading at 19,646.02, down by 102.17 points or 0.52% after trading in a range of 19,751.03 and 19,625.26. There were 13 stocks advancing against 17 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.05% and Small cap index lost 0.61%.

The top gaining sectoral indices on the BSE were, IT up by 0.94%, Teck up by 0.59% and Auto up by 0.56%, while FMCG down by 2.52%, Metal down by 1.07%, PSU down by 0.99%, Bankex down by 0.85% and Consumer Durables down by 0.74%were the top losers on the BSE.

The top gainers on the Sensex were Wipro up by 6.17%, Jindal Steel up by 2.82%, Tata Motors up by 2.26%, Sun Pharma up by 1.46% and Hero MotoCorp up by 0.86%. On the flip side, Hindustan Unilever was down by 4.45%, Hindalco Industries was down by 4.40%, ITC was down by 2.43%, Sterlite Industries was down by 2.42% and Maruti Suzuki was down by 2.23% were the top losers on the Sensex.

Meanwhile, against the backdrop of Reserve Bank of India’s (RBI) tight monetary policy impacting the industry negatively and its measures to shore up rupee by tightening the liquidity from the system, which may further choke growth, Prime Minister Manmohan Singh will be meeting the Council on Trade and Industry and will discuss key problems relating to subdued growth, volatile exchange rate and widening current account deficit, among others.

Singh is expected to inform leading industrialists that the government plans to use the public sector as a driver of growth and crowd in private sector activities, while the industrialists on their part will be taking up issue of negative sentiment which is presently haunting the industry.

It is also expected that the Prime Minister will also discuss ways to accelerate skill development, besides development of the Delhi-Mumbai Industrial Corridor (DMIC), the Chennai-Bangalore Industrial Corridor (CBIC) and the Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC).

The meeting is likely to be attended by CII President Kris Gopalakrishnan, ICICI Bank MD and CEO Chanda Kochhar, HDFC Chairman Deepak Parekh, and Bharti group Chairman Sunil Mittal besides several others.The CNX Nifty is currently trading at 5,851.45 down by 34.75 points or 0.59% after trading in a range of 5,886.00 and 5,843.95. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Jindal Steel up by 2.90%, Tata Motors up by 2.21%, Axis Bank up by 0.95%, Hero MotoCorp up by 0.90%, and Bharti Airtel up by 0.76%. On the flip side, Ambuja Cement down by 4.91%, Hindustan Unilever down by 4.69%, Hindalco down by 4.24%, Kotak Bank down by 3.08% and Sesa Goa down by 2.97% were the major losers on the index.

The Asian equity indices were trading in red; Shanghai Composite declined 1.59%, Hang Seng dropped 0.65%, Jakarta Composite shed 1.37%, KLSE Composite slipped 0.38%, Nikkei 225 tumbled 3.32%, Straits Times dipped 0.24% to 3,228.29, Seoul Composite decreased 9.20 points or 0.48% to 1,901.61 and Taiwan Weighted was down by 0.80%.