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Market participants remain jittery ahead of the Reserve Bank of India's (RBI's) monetary policy review on tomorrow. After a early sell-off on heavy volumes that saw benchmark stock indices plummet heavily, market recovered from it's day's lows in noon deals.
At 1:06pm, the 30-share BSE Sensex was lower by almost 297 points at 20,838 levels and the 50-unit Nifty declined by 95 points at 6,172 mark.
Broader markets are in turmoil too with BSE Mid-Cap and Small-Cap indices were off more than 2% each. Weakness in Asian stocks and a steep slide in US stocks on Friday, 24 January 2014, hit sentiment on the domestic bourses adversely.
Rate sensitives continue to remain under selling pressure weighed down by banks, capital goods, metal and auto shares.
On the global front, Asian shares took a beating and the yen raced to a seven-week high against the dollar on Monday, as emerging markets remained under pressure with the US Federal Reserve poised to continue tapering its stimulus and tighter credit conditions in China raising fears of a slowdown.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 1.6% to nearly a five-month low, on track for its worst one-day performance since August after losing more than 1.0% on Friday. Japan's Nikkei share average gave up the 15,000-level and dropped 2.7%.
Back home, the rupee hit 62.67 in early trade, its lowest level since November 22, as Asian stocks were trading with heavy losses. The pair was last trading at 62.77/78 vs Friday's close of 62.66/67.
On the sectoral front, BSE Bankex, Capital Goods, Realty, Metals and Auto indices have slumped by 3% each. Infact, all the major BSE sectoral indices are trading in red zone.
Rate sensitive shares were among the top losers in early trades on Monday, amid weak global cues, on fears that interest rates would continue to remain high.
Last week, Reserve Bank of India Governor Raghuram Rajan commented that inflation is a destructive disease which is forcing the central bank to keep interest rates high.
Bank stocks have declined ahead of the Reserve Bank of India (RBI) Third Quarter Review of Monetary Policy for 2013-14 tomorrow
Bank shares were among the top losers in early trades with ICICI Bank, HDFC Bank, SBI and Axis Bank down 2-3% each.
In the auto pack, Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Bajaj Auto and Hero MotoCorp were down 1-4% each.
Engineering majors BHEL and Larsen & Toubro were both down over 2% each.
Shares in Tata Motors fell 5% on Monday after the automaker's managing director, Karl Slym, died on Sunday when he fell from a high floor of a hotel in Bangkok.
TCS slipped after turning ex-dividend today. FMCG major Hindustan Unilever has declined ahead of its Q3 results today.
Ranbaxy Laboratories has dipped by nearly 8%, adding to Friday's 19.43% plunge, as the drug maker continues to reel after the U.S. drug regulator banned more of its products.
Other notable losers are Sesa Sterlite, Hindalco, Tata Steel, Bharti Airtel and Tata Power.
Among other shares, Kaveri Seed rose to Rs 402 after the company's shares were quoted as stock split from today with record date being January 28, 2014.
Shares of Glenmark Pharmaceuticals were up 3% at Rs 524 after the company reported growth in its speciality and generic business despite a challenging business environment.
Torrent Power has lost 3.79% to Rs 102.90 at 9:42 IST on BSE after the company reported consolidated net loss of Rs 35.51 crore in Q3 December 2013 as against net profit of Rs 95.66 crore in Q3 December 2012.
The broader markets continue to underperform the benchmark indices- BSE Midcap and Smallcap indices have fallen by nearly 2% each.
The market breadth in BSE remains dismal with 549 shares advancing and 1805 shares declining.
Banking shares
Shares of Hindustan Unilever were down over 1% at Rs 558 ahead of its third quarter earnings due for release later today on worries over slowdown in volume growth and margin pressure for the quarter ended December 2013.
Banking shares are under pressure falling by up to 6% on the bourses ahead of the Reserve Bank of India (RBI) third- quarter review of monetary policy for 2013-14 tomorrow.
The expectations on the street are mixed about the stance of the policy. This is because earlier this week the report of the expert committee to revise and strengthen the monetary policy framework was very hawkish, according to the Business Standard reports.
The RBI kept its main lending rate viz. the repo rate unchanged after its last policy review in December and said at that time that it expected inflation to ease in the following months.
YES Bank, ICICI Bank, Bank of Baroda, Bank of India, IndusInd Bank, Canara Bank and Punjab National Bank are down in the range of 4-6%, while HDFC Bank, Kotak Mahindra Bank and Axis Bank are trading lower by 3% each on the National Stock Exchange (NSE).
The NSE banking share index Bank Nifty, the second largest loser among sectoral indices, down 3.4% compared to 1.65% fall in benchmark CNX Nifty at 1150 hours.
CNX Nifty has tanked nearly 400 points in intra-day trades, touched a low of 10,596 points against its Friday’s close of 10,982.
Among the individual stocks, YES Bank is the largest losers; tanked 6% at Rs 328, followed by Dhanlaxmi Bank, IndusInd Bank and Uco Bank are down 5% each on the NSE.
Finolex Industries has surged 7% to Rs 161 in otherwise weak market after reporting more than double net profit at Rs 63.89 crore for the third quarter ended December 2013 (Q3) due to forex gain. The company engaged in plastic pipes had profit of Rs 30.61 crore in a year ago quarter. The company’s net sales grew 6.5% at Rs 660 crore on year-on-year basis.
The company has reported a foreign exchange gain of Rs 9.64 crore in December 2013 quarter against loss of Rs 36.72 crore, Finolex Industries said in a statement.
The stock opened at Rs 154 and touched a high of Rs 162 on the BSE. A combined 341,000 shares changed hands on the counter till noon deals on the BSE and NSE.
