Key benchmark indices extended slide in afternoon trade as caution prevailed ahead of the Reserve Bank of India's monetary policy decision later in the day. At 13:15 IST, the barometer index, the S&P BSE Sensex, declined 54.26 points or 0.17% at 32,520.91. The Nifty 50 index lost 26.25 points or 0.26% at 10,088.40. Market sentiment was negative amid subdued opening on European bourses.
Indices opened higher and hit fresh record highs in early trade tracking firm Asian stocks. Market hovered in the positive terrain near the flat line in morning trade. Indices traded with small losses after slipping into the red in mid-morning trade. Later, indices traded with small losses in early afternoon trade.
The S&P BSE Mid-Cap index fell 0.34%. The decline in the index was higher than the Sensex's fall in percentage terms. The S&P BSE Small-Cap index gained 0.05%, outperforming the Sensex.
The breadth, indicating the overall health of the market, was negative. On the BSE, 1,349 shares fell and 1,114 shares rose. A total of 159 shares were unchanged.
Cement stocks gained. ACC (up 1.41%), Ambuja Cements (up 0.86%), UltraTech Cement (up 0.41%) and Grasim Industries (up 0.02%) edged higher. Shree Cement (down 0.53%) declined.
FMCG stocks were mostly lower. Godrej Consumer Products (down 2.74%), Colgate-Palmolive (India) (down 2.58%), Marico (down 1.67%), GlaxoSmithkline Pharmaceuticals (down 0.98%), Britannia Industries (down 0.84%), Hindustan Unilever (down 0.45%) and Dabur India (down 0.41%) declined. Emami (up 1.68%), Procter & Gamble Hygiene and Health Care (up 0.35%) and Nestle India (up 0.14%) advanced.
EIH rose 1.17% at Rs 133.90 after the company reported net profit of Rs 11.52 crore in Q1 June 2017 as compared with net loss of Rs 12.24 crore in Q1 June 2016. The company reported a 8.66% rise in total income to Rs 302.88 crore in Q1 June 2017 over Q1 June 2016. The result was announced after trading hours yesterday, 1 August 2017.
On the macro front, the Reserve Bank of India (RBI)'s monetary policy meeting is scheduled at 14:30 IST today, 2 August 2017. RBI is likely to cut policy rates by 25 basis points. In June 2017, RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25%. Consequently, the reverse repo rate under the LAF remained at 6%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.5%.
Meanwhile, Arvind Panagariya, the first vice-chairman of Niti Aayog, reportedly announced yesterday, 1 August 2017, that he will step down from the post and return to academia in the United States. The decision is understood to have followed the economist having informed the government a couple of months ago that he would like to return to Columbia University.
The Government of India has garnered over Rs 1.8 lakh crore in direct tax till 15 July 2017 in the current FY 2018, representing a growth of 21.4% over the same period last year. The current growth rate is higher than the target rate of 15.32% required to achieve the budget estimate. Through direct taxes, the government aims to collect Rs 9.8 lakh crore in FY 2018.
Overseas, European stocks were mixed. Most Asian stocks rose helped by strong results from Apple. US stocks closed higher yesterday, 1 August 2017 and the Dow Jones Industrials Average racked up a fifth straight record high powered by Goldman Sachs, JPMorgan Chase and other banks.
Economic data showed US consumer spending barely rose in June as income failed to increase for the first time in seven months. Also, American manufacturers tapped on the brakes lightly in July but were still expanding near the fastest pace in three years. The Institute for Supply Management said its manufacturing index fell slightly to 56.3% last month after reaching a three-year high of 57.8% in June.
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