Indian markets trade marginally lower ahead of RBI’s monetary policy

After exhibiting strong up-move in previous session, Indian equity benchmarks are trading slightly lower in early deals as investors booked some of their profits in rate sensitive counters ahead of Reserve Bank of India’s (RBI’s) monetary policy announcement. Although, there is not much expectation of a rate cut but there is wide expectation of partial roll back in the tight-money policy by reducing the marginal standing facility (MSF) from 10.25% by about a percentage point to 9.25%. Sentiments also remained subdued after Indian rupee depreciated against dollar in early deals. Rupee opened at 62.05 against the dollar compared to yesterday’s closing level of 61.77/dollar.

Global cues too remained choppy with the US markets ending mixed overnight after a rally induced by Fed’s decision to keep the bond buying programme intact. Stocks traded in a relatively lackluster manner throughout the session, though a batch of economic data came positive. Moreover, of the few Asian equity counters that were trading, mostly were in the negative terrain in Friday’s morning deals with Japanese markets were trading slightly in the red with investors treading cautiously amid doubts about the near-term outlook for the market after Thursday’s sharp up-move.

Back home, stocks related to textile and apparel industry were trading higher as Apparel Export Promotion Council (AEPC) has reported that the industry is witnessing an upswing and the exports are likely to go up from $13 billion last year to $17 billion in the next two years on the back of economic recovery in the US and Europe. On the sectoral front, power witnessed the maximum gain in trade followed by software and healthcare, while metal, capital goods and public sector undertakings remained the top losers on the BSE sectoral space. The broader indices, however, were exhibiting some traction, while the market breadth on the BSE was positive; there were 766 shares on the gaining side against 548 shares on the losing side while 62 shares remain unchanged.

The BSE Sensex opened at 20616.35; about 30 points higher compared to its previous closing of 20646.64, and has touched a high and a low of 20649.38 and 20551.89 respectively. The index is currently trading at 20622.26, down by 24.38 points or 0.12%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a strong start with 48.57% stocks advancing against 45.20% declines. The broader indices were trading in green; the BSE Mid cap index up by 0.17% and Small cap index up by 0.27%. 

The top gaining sectoral indices on the BSE were, Power up by 1.03%, IT up by 0.95%, Health Care up by 0.80%, Teck up by 0.65% and Consumer Durables up by 0.13%, while Metal down by 0.96%, Capital Goods down by 0.76%, PSU down by 0.59%, FMCG down by 0.45% and Bankex down by 0.44% were the top losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 2.21%, Sun Pharma up by 1.99%, Wipro up by 1.81%, Tata Power up by 1.27% and Tata Motors up by 0.984%. On the flip side, Hero MotoCorp was down by 2.49%, Sesa Goa was down by 2.24%, ONGC was down by 2.21%,  Maruti Suzuki was down by 2.07% and Bajaj Auto was down by 1.95% were the top losers on the Sensex.

Meanwhile, the government is likely to allow foreign direct investment (FDI) in the railways sector, which is facing a cash crunch, in order to develop rail lines between project sites and existing network. The move will help in attracting more FDI besides helping in the development of infrastructure for industrial purposes.

The Department of Industrial Policy and Promotion (DIPP) has proposed to permit 100 percent FDI under automatic route that will construct and maintain rail lines connecting ports, mines and industrial hubs with the existing rail network. It will be first-to-last mile connectivity between ports, coal mines to the existing railway freight stations and will smooth the movement of raw materials from mines to ports, it added. The DIPP has completed consultations with the concerned ministries on the proposal and will soon seek Cabinet nod for the proposal.

Presently, Indian industrial development and exports have been suffering due to poor infrastructure, which hampers output and raises the cost of production. Indian railways can play an important role in providing a reliable transport facility necessary for promoting industrial growth in the country. The move will provide adequate funds to the railway ministry, whose effort towards attracting funds through public-private partnership for infrastructure projects have failed. Further, railway ministry expects Rs 25,000 loss in the passenger segment for this year.

The CNX Nifty opened at 6,104.55; about 10 points lower as compared to its previous closing of 6,115.55, and has touched a high and a low of 6,120.25 and 6,087.95 respectively. The index is currently trading at 6,110.90, down by 4.65 points or 0.08%. There were 24 stocks advancing against 25 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were HCL Tech up by 2.47%, Lupin up by 2.30%, BHEL up by 2.17%, UltraTech Cement up by 2.06% and Sun Pharmaceuticals up by 1.83%. On the flip side, Ranbaxy down by 5.01%, JP Associate down by 3.54%, Hero MotoCorp down by 2.51%, Sesa Goa down by 2.48% and ONGC down by 2.34% were the major losers on the index.

Most of the Asian equity indices were trading in red; Jakarta Composite declined 56.02 points or 1.20% to 4,614.71, Nikkei 225 slipped 26.65 points or 0.18% to 14,739.53 and Straits Times was down by 10.87 points or 0.33% to 3,240.91.

On the flip side, KLSE Composite was up by 9.36 points or 0.52% to 1,802.27.

Markets in China, Hong Kong, South Korea and Taiwan remained closed for the trade on public holidays.