 "Sensex slips below 28,000; Oil, IT shares drag")
Benchmark indices were trading lower in noon trades on selling pressure across the board with oil and information technology leading the decline.
The RBI in its third bi-monthly monetary policy review meeting kept the repo rate unchanged at 7.25% while the cash-reserve-ratio (CRR) is also maintained at 4%.
At 12:30 PM, the 30-share Sensex was down 307 points at 27,881 while the 50-share Nifty was down 88 points at 8,455.The Bank Nifty was flat at 18,921.
On the monsoon front, the IMD expects southwest monsoon for the remaining two months would be below normal at 84 per cent of the long-period average (LPA) as El Niño weather conditions have strengthened in the past few months.
On the currency front, the Indian rupee is quoting at 63.86, depreciating by 17 paise against the US dollar.
EXPERT VIEW ON RBI POLICY
According to Kunal Shah,Fund Manager, Debt at Kotak Mahindra Old Mutual Life Insurance, “RBI has maintained a status quo on rates. Given the frontloading of cut in June policy, RBI will monitor transmissions by banks in terms of lower lending rates, full monsoon performance by September & external events like commodity prices and Federal Reserve rate policy. We believe if monsoon performance is satisfactory and if global commodity prices remain benign, it will open space for more easing. RBI has highlighted that non-food inflation uptick is worrisome and needs to be monitored carefully."
He further added, "For bond markets, policy guidance is less dovish than expected also more easing of rates are contingent on various factors. Hence, in near term 10y yields can remain in a range of 7.75-7.85%. Markets will keep a close watch on rains and oil prices. We believe lower growth & lower commodity prices can provide further room for 25-50bps cuts in near to medium term, which will pull down 10y Gsec yields towards 7.50%.”
SECTORS & STOCKS
Rate-sensitive sectors are trading mix with BSE Bankex and Auto indices up beteen 0.1-0.4% each while BSE Realty index down by 0.3%
In the banking space, SBI, Axis Bank, HDFC Bank, PNB are up between 0.2-2% while ICICI Bank is trading flat.
In the auto pack, Hero Motocorp, M&M and Maruti Suzuki are up between 0.4-1.5%, while Tata Motors is down 1.3%.
In the Realty space, IBRealest, Prestige, DB Realty are up between 0.3-4.3%. However, Sobha, DLF, Godrej Properties, and Unitech down between 0.1-1.9%.
Brent crude oil dropped below $50 a barrel for the first time since January as Iran vowed to boost production immediately after sanctions are lifted and manufacturing in China slowed. Reacting to the news, BPCL, HPCL and IOCL are trading firm and are up between 0.3-2.3%. However, oil and gas exploration companies have slumped in today’s tarde. ONGC, RIL and GAIL are down between 1.2-2.5%.
Among other stocks, Bharti Airtel is trading higher by 0.5% ahead of its quarterly results.
After suffering losses on the back of disappointing Chinese manufacturing numbers, metal shares are trading mixed. Tata Steel is flat while Vedanta is down by 1.1%. Hindalco and Coal India are trading higher between 1.1- 1.6%.
The RBI in its third bi-monthly monetary policy review meeting kept the repo rate unchanged at 7.25% while the cash-reserve-ratio (CRR) is also maintained at 4%.
At 12:30 PM, the 30-share Sensex was down 307 points at 27,881 while the 50-share Nifty was down 88 points at 8,455.The Bank Nifty was flat at 18,921.
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The broader markets are outperforming their larger peers with BSE Midcap and Smallcap indices up by 0.5% and 0.4% respectively. The market breadth is strong with 1,402 advances against 1,182 declines.
On the monsoon front, the IMD expects southwest monsoon for the remaining two months would be below normal at 84 per cent of the long-period average (LPA) as El Niño weather conditions have strengthened in the past few months.
On the currency front, the Indian rupee is quoting at 63.86, depreciating by 17 paise against the US dollar.
EXPERT VIEW ON RBI POLICY
According to Kunal Shah,Fund Manager, Debt at Kotak Mahindra Old Mutual Life Insurance, “RBI has maintained a status quo on rates. Given the frontloading of cut in June policy, RBI will monitor transmissions by banks in terms of lower lending rates, full monsoon performance by September & external events like commodity prices and Federal Reserve rate policy. We believe if monsoon performance is satisfactory and if global commodity prices remain benign, it will open space for more easing. RBI has highlighted that non-food inflation uptick is worrisome and needs to be monitored carefully."
He further added, "For bond markets, policy guidance is less dovish than expected also more easing of rates are contingent on various factors. Hence, in near term 10y yields can remain in a range of 7.75-7.85%. Markets will keep a close watch on rains and oil prices. We believe lower growth & lower commodity prices can provide further room for 25-50bps cuts in near to medium term, which will pull down 10y Gsec yields towards 7.50%.”
SECTORS & STOCKS
Rate-sensitive sectors are trading mix with BSE Bankex and Auto indices up beteen 0.1-0.4% each while BSE Realty index down by 0.3%
In the banking space, SBI, Axis Bank, HDFC Bank, PNB are up between 0.2-2% while ICICI Bank is trading flat.
In the auto pack, Hero Motocorp, M&M and Maruti Suzuki are up between 0.4-1.5%, while Tata Motors is down 1.3%.
In the Realty space, IBRealest, Prestige, DB Realty are up between 0.3-4.3%. However, Sobha, DLF, Godrej Properties, and Unitech down between 0.1-1.9%.
Brent crude oil dropped below $50 a barrel for the first time since January as Iran vowed to boost production immediately after sanctions are lifted and manufacturing in China slowed. Reacting to the news, BPCL, HPCL and IOCL are trading firm and are up between 0.3-2.3%. However, oil and gas exploration companies have slumped in today’s tarde. ONGC, RIL and GAIL are down between 1.2-2.5%.
Among other stocks, Bharti Airtel is trading higher by 0.5% ahead of its quarterly results.
After suffering losses on the back of disappointing Chinese manufacturing numbers, metal shares are trading mixed. Tata Steel is flat while Vedanta is down by 1.1%. Hindalco and Coal India are trading higher between 1.1- 1.6%.