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Benchmark indices closed lower on Monday as caution prevailed ahead prevailed a day before the RBI policy review. Also, slower growth in Indian factory activity dampened the sentiments of the market participants.
Provisionally, the 30-share Sensex ended lower by 61 points at 29,122 mark and the 50-share Nifty slipped by 12 points to close at 8,797.
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Updated at 14:55
Benchmark indices have slipped in the negative territory ahead of the RBI bi-monthly monetary policy review on Tuesday, led by losses in shares of FMCG and metal shares.
Provisionally, the 30-share Sensex ended lower by 61 points at 29,122 mark and the 50-share Nifty slipped by 12 points to close at 8,797.
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Updated at 14:55
Benchmark indices have slipped in the negative territory ahead of the RBI bi-monthly monetary policy review on Tuesday, led by losses in shares of FMCG and metal shares.
Growth in India's factory activity slipped in January from December's two-year high as new orders rose at a weaker rate despite factories keeping price increases to a minimum, a business survey showed on Monday.
By 2.48 PM, the Sensex is lower by 112 points at 29,071 mark and the Nifty slipped by 29 points at 8,779.
However, broader markets are outperforming the benchmark indices- BSE Midcap and the Smallcap indices are up between 0.5-1%..
Market breadth in BSE is positive with 1,548 shares advancing and 1,237 shares declining.
Meanwhile, foreign portfolio investors sold shares worth a net Rs 771.55 crore on Friday, as per provisional stock exchange data.
Local Currency:
The rupee weakened by nine paise to 61.95 against the dollar in early trade on Monday at the Interbank Foreign Exchange due to high demand for the US currency from importers.
Crude Oil:
Crude oil prices fell on Monday after U.S. unions called a refinery strike and traders cashed in on strong price gains last week when the market soared on a sharp drop in U.S. drilling.
Global Markets:
Asia markets were trading lower after China’s factory sector shrank in January for the first time in more than two years, the latest signal that the country’s growth slowdown is set to persist. China’s Shanghai Composite fell 2%, Hong Kong’s Hang Seng 0.5% and Japan’s Nikkei Stock Average 0.6%. China’s manufacturing sector contracted for a second consecutive month in January to 49.8 from 50.1 in December, according to HSBC purchase manager’s index.
US markets ended lower on Friday after a disappointing report on December-quarter gross domestic product. Growth slowed to an annualised pace of 2.6% year on year from 5% in the September quarter, as a strong pick-up in consumer spending was offset by weak business investment, reports Financial Times. The Dow Jones Industrial Average, Nasdaq Composite and S&P 500 were down over 1% each.
On the other hand, European stocks have shrugged the weakness in the global peers and are trading higher in today’s trade. FTSE 100, DAX and CAC 40 are up between 0.1-0.4%.
Key Stocks:
On the sectoral front, barring BSE FMCG and Oil & Gas indices down between 0.5-1.5%, all other indices are trading in the positi8ve territory and are up between 0.2-1.5%. BSE Capital Goods index is leading the rally up 1.5%.
Rate sentive stocks are seen to be witnessing fresh buying in today’s trade ahead of the RBI monetary policy due to9morrow.
Banking shares which were reeling under pressure in the early trades have rebounded in the noon deals on hopes of further rate cuts. Axis Bank and HDFC twins are surging up between 0.5-3.4%. HDFC Bank is likely to raise Rs 10,000 crore on Tuesday. The private lender is said to have appointed Bank of America Merrill Lynch to manage the share sale.
Engineering conglomerate L&T is up 2% on hopes to build nuclear reactors in partnership with Westinghouse Electric Company and is exploring other partnerships after India and the US cleared the way for implementing a bilateral agreement signed in 2008. Its peer BHEL has gained 1%.
A depreciating rupee has helped the technology pack to inch higher in today’s trade. Wipro and TCS are up between 1-3%.
Index heavyweight Tata Motors reported a 5.19 per cent increase in total sales at 42,582 units in January, as against 40,481 units in the same month last year. The stock has climbed nearly 1.7%.
Sun Pharma has gained over 1% as U.S. Federal Trade Commission (FTC) has completed its review of the proposed acquisition of Ranbaxy by Sun Pharma and has granted early termination of the waiting period.
GAIL, Maruti Suzuki, Hindalco are some of the notable gainer and are up between 1-3.5%.
On the flip side, Dr Reddys Lab has declined over 2% after its quarterly results came below market expectations. Credit Suisse has downgraded the stock to "neutral" from "outperform".
Coal India has declined around 2% after the government raised Rs 22,557.63 crore from the sale of its 10 per cent shareholding in Coal India.
ICICI Bank is down 2.5% on asset quality woes.
Shares of Bajaj Auto is trading lower by 2% after the company reported 9% year-on-year (y-o-y) decline in total sales at 288,746 units in January 2015 as compared to 318,171 units in January 2014.
Auto major Mahindra & Mahindra today reported six per cent decline in total sales at 39,930 units in January. The stock is down nearly 2%.
FMCG major HUL is down over 2% as the potential for sales growth through product price hikes is dwindling as raw materials are becoming cheaper.
Metal stocks are reeling under pressure with Tata Steel and Sesa Sterlite down between 0.3-1% after India’s manufacturing activities expanded at a three-month-low pace. Also, China's manufacturing sector was in a poor state in January, a private survey confirmed on Monday, amid increasing speculation that policymakers will intervene with fresh measures to spur the economy.
