Markets opened in the green tracking firm Asian peers, but immediately turned negative few minutes after opening as investors sold banking shares ahead of RBI (Reserve Bank of India) policy announcement tomorrow.
The S&P CNX Nifty scaled to 5,775 and fell 29 points from the opening high to 5730, down 18 points. The benchmark Sensex was down 30 points, at 19,102.
Economists expect 25-50 bps rate hike on Tuesday as food prices continue to remain at elevated levels. From the banking pack, IDFC dipped 1.6%, Axis Bank fell 1% and State Bank of India declined 2%.
While markets succumbed to profit booking in the morning session, Analysts expect uptrend to resume in the medium term since Nifty was unable to break the 200 Daily Moving Average of 5747during Friday’s closing trade. Edelweiss in the morning note said, "Nifty managed to take support at the 50-Daily Exponential Moving Average (5707) and closed above the critical 5747 level keeping the bulls in the hunt. Momentum oscillators have turned down on the daily chart, whereas on the hourly chart have rolled bullish indicating upside in the early part of the current week."
In Asia, markets in Japan rallied buoyed by technology and banking stocks. The Nikkei Stock Average was up 1% at 9,945 and Seoul Composite was up 1.5% at 2,224. Other markets in China, Hong Kong and Taiwan were shut on account of holiday.
Back in India BSE Consumer Durable index was leading the gains, up 1.3%. Videocon Industries zoomed 2.2%, Titan Industries added 1.8% and Gitanjali Gems gained 1.8%. Investors are betting on the consumer driven sectors for the next led of rally. TS Harihar, Co-Head-Institutional Derivatives, ICICI Securities, “the next 10 years belong to consumer driven industries that will benefit from the spending power. Long-only fund managers are betting on consumer driven companies which will experience a multiplier effect on their bottom-line because of increasing demand and shifts in demand patterns.”
Harihar added, "the serious long-term money is shifting out of interest rate sensitives like infrastructure, capital goods, real estate and banking into consumer driven sectors like FMCG, pharma etc, which is the long term story."
Among individual stocks Infosys surged 0.7% after it named S.D. Shibulal as the Chief Executive Officer in place of S. Gopalakrishnan who will be the company's executive co-chairman. Automakers such as Mahindra & Mahindra and Maruti Suzuki were up 0.9% each ahead of April sales numbers.
Top gainers on the Sensex were DLF and Tata Power, up 1.4% each, and Bharti Airtel declined 1.1%. Prominent losers were Larsen & Tourbo, down 1.6%, Jindal Steel fell 1.5% and Reliance Communication dipped 1.3%.
Broader markets were trading flat, the midcap and smallcap indices were up 0.1% and 0.2% each. Market breadth was positive 911 stocks advanced for 823 stocks which declined.
