Metals falter in a weak market; Shanghai cracks over 3%

Caution reigns ahead of the FOMC meet due later during this week

Markets continue to trade weak in the noon trades as selling intensifies on caution ahead of the FOMC meet due later during this week. However, favourable macro-economic data back home has brightened hopes of rate cut by the RBI in the next monetary policy which has capped losses.

By 12:00 PM, the Sensex was lower by 127 points at 25,729 and the Nifty slipped 46 points at 7,826. The broader markets are in tandem with the benchmark indices- BSE Midcap and Smallcap indices are down 0.4-0.6%. Markets breadth is negative on the BSE with 938 shares advancing and 1,237 shares declining.

MACRO-ECONOMIC DATA

Inflation based on the consumer price index (CPI) declined to a nine-month low of 3.66 per cent in August from 3.69 per cent in July, but the rate of food price rise went up to 2.20 per cent from 2.15 per cent.

Wholesale price index for the month of August has contracted further to 4.95% The government is scheduled to unveil the consumer price index (CPI) data for the month of August 2015 after market hours today.

The IIP numbers that were announced on Friday post market hours showed that the industrial output grew at 4.2% in July thus indicating a revival in Indian economy.

RUPEE

The rupee has depreciated by 11 paise at 66.43 against the US dollar on sustained bouts of dollar demand from banks and importers amid weakness in the local equities. Meanwhile, possibility of a Fed rate hike in the US FOMC meet has fuelled the decline.

STOCK TRENDS

All sectoral indices barring BSE FMCG, Healthcare, IT and Realty indices, all other indices are trading in red with BSE Auto, Metal, Consumer Durables and Bankex trading lower by 1% each.

Maruti Suzuki India has gained nearly 1% after the Reserve Bank of India (RBI) allowed foreign investors to invest up to 40% of the paid-up capital in the company under the portfolio investment scheme.

Metal stocks are losing sheen in today’s trade as China's investment and factory output in August missed forecasts, raising concerns over the growth of world’s second largest economy, China. Tata Steel, Hindalco and Vedanta are trading lower between 3-5%.

Sun Pharma is planning to acquire US Based InSite Vision Inc according to media reports. The stock is up 1%.

The FMCG stocks are trading firm on the back of cooling retail inflation numbers. CPI declined to a nine-month low of 3.66% in August from 3.69% in July. ITC and HUL are up nearly 1% each.

Texmaco Rail Engineering’s board has approved acquiring a majority 76 per cent stake in Bright Power for Rs 100 crore. The stock is up 2.5%. 

Asian Paints has transferred the entire holding in its subsidiaries to Berger International Limited, Singapore to consolidate investments of the company in overseas subsidiaries.The stock is trading nearly 15 lower.

Corporation Bank is up 2.4% on reports that LIC will infuse Rs 143 crore into the bank by way of preferential equity.

GLOBAL STOCKS

Asian peers are losing sheen with stocks in Shanghai deepening losses ahead of key decisions on monetary policy by central banks in Japan and the US.

The Shanghai Composite Index fell over 3% and the Hang Seng Index down 0.3%. The Nikkei Stock Average gained 0.5% ahead of comments from the Bank of Japan expected later today.