A range bound movement was witnessed as key benchmark indices languished in negative zone in morning trade. At 10:15 IST, the barometer index, the S&P BSE Sensex, was down 55.73 points or 0.2% at 28,021.27. The Nifty 50 index was currently down 19.25 points or 0.22% at 8,647.65. The Sensex was currently trading above the psychologically important 28,000 level after briefly falling below that level in morning trade.
The Sensex lost 89.49 points or 0.31% at the day's low of 27,987.51 in morning trade, its lowest level since 17 August 2016. The barometer index rose 66.28 points or 0.23% at the day's high of 28,143.28 in early trade. The Nifty lost 34.45 points or 0.39% at the day's low of 8,632.45 in morning trade, its lowest level since 17 August 2016. The index rose 17.95 points or 0.2% at the day's high of 8,684.85 in early trade.
The small losses on the bourses materialized after the government on Saturday, 20 August 2016, named Reserve Bank of India (RBI) deputy governor Urjit Patel as new RBI governor. Patel is known for his hawkish view on inflation just like Raghuram Rajan whose term as the RBI governor ends on 4 September 2016. Patel will take charge as RBI governor for a 3 year term from 4 September 2016. Patel handles the monetary policy department as the RBI deputy governor. By naming Patel who is a deputy governor at the central bank as the new RBI governor, the government is sending signal to markets that there will be continuity of central bank's policies.
The government early this month notified consumer price inflation target of 4% with upper tolerance level of 6% and lower tolerance level of 2% to be achieved by RBI. This target is valid until 31 March 2021.
In overseas stock markets, Asian stocks were trading mixed amid uncertainty whether the US Federal Reserve is readying an interest rate hike next month. US stocks registered small losses on Friday, 19 August 2016, with traders holding their horses ahead of a speech from Federal Reserve chair Janet Yellen at Jackson Hole later this week. Yellen's speech at the Kansas City Fed's annual Monetary Policy Symposium in Jackson Hole, Wyoming is scheduled on Friday, 26 August 2016. Minutes from the Federal Open Market Committee's (FOMC) July meeting showed officials were split on whether an increase in interest rate was needed soon.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,027 shares rose and 941 shares declined. A total of 122 shares were unchanged. The BSE Mid-Cap index was currently down 0.02%. The BSE Small-Cap index was currently down 0.05%. The losses for both these indices were lower than the Sensex's decline in percentage terms.
Stocks of public sector banks edged lower and those of private sector banks witnessed a mixed trend after Patel was named new RBI governor. Among state-run banks, Indian Bank (down 1.86%), Bank of Baroda (down 1.73%), Union Bank of India (down 1.51%), Punjab National Bank (down 0.7%), Corporation Bank (down 0.48%), Bank of India (down 0.31%), Canara Bank (down 0.3%) and IDBI Bank (down 0.14%) edged lower. United Bank of India (up 0.68%) and Indian Overseas Bank (up 0.19%) edged higher.
State Bank of India (SBI) was down 0.52% at Rs 257.15. The bank announced that the Committee of directors of the bank is scheduled to meet on 24 August 2016, to examine the status and decide on long term AT1 fund raising in single/multiple tranches in domestic/foreign currency through a public offer and/or private placement during the current financial year (FY 2017). The announcement was made on Saturday, 20 August 2016.
Stocks of private sector banks were mixed. Kotak Mahindra Bank (down 0.52%), Axis Bank (down 0.58%) and ICICI Bank (down 1.26%) edged lower. IndusInd Bank (up 0.15%) edged higher.
Index heavyweight HDFC Bank was up 0.04% at Rs 1,245.45. The stock hit a high of Rs 1,254.05 and a low of Rs 1,244 so far during the day.
Yes Bank was up 0.56% at Rs 1,344.10. The bank announced that it has received the approval from Reserve Bank of India (RBI) for appointment of Ashok Chawla as non-executive part-time Chairman of the bank for a period of three years with effect from 30 October 2016. Chawla, an independent director, was appointed on Yes Bank's board on 5 March 2016. The announcement was made during market hours today, 22 August 2016.
Metal and mining stocks edged lower as copper prices declined in global commodities markets. Tata Steel (down 1.53%), Hindalco Industries (down 1.55%), Vedanta (down 0.98%), Jindal Steel & Power (down 1.65%), JSW Steel (down 0.01%), Steel Authority of India (down 2.11%), NMDC (down 0.18%), Hindustan Copper (down 1.14%) and Hindustan Zinc (down 0.44%) edged lower. National Aluminium Company (up 0.1%) edged higher.
High Grade Copper for September 2016 delivery was currently off 0.55% at $2.1550 per pound on the COMEX.
NBCC (India) rose 0.74% at Rs 243.55 after the company said that it has secured an order worth about Rs 120 crore for construction of a building from Archaeological Survey of India. The announcement was made on Saturday, 20 August 2016.
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