Stock Markets: Investors in wait and watch mode
Markets fall as investors turn cautious ahead of RBI monetary policy review, US inflation data later this week
Mumbai: Benchmark equity indices fell on Tuesday as investors turned cautious ahead of the key events -- RBI's monetary policy and the US inflation data -- due to be announced later this week.
Continuous foreign fund outflows and weak trend in Asian and European markets also played spoilsport for the domestic markets. The 30-share BSE Sensex fell 106.98 points or 0.16 per cent to settle at 65,846.50. During the day, it declined 200.85 points or 0.30 per cent to 65,752.63. The NSE Nifty slipped 26.45 points or 0.13 per cent to end at 19,570.85.
Amid expectations of another status quo on the key interest rates, RBI Governor Shaktikanta Das-headed high-powered rate-setting panel MPC on Tuesday began its three-day meeting to firm up the next bi-monthly policy. The decision of the Monetary Policy Committee (MPC) would be announced on Thursday, August 10, by Governor Das.
"On the global front, investors are adopting a cautious approach even amidst declining bond yields as they await the release of crucial economic data. The significant drop in Chinese exports has also contributed to concerns within the global market. "FIIs remain in a selling mode in the domestic market, yet active buying from DIIs is mitigating downside risks. Among sectors, PSU banks and pharma stocks inched up, while mid and small-cap stocks have continued to outperform the benchmark, showcasing their resilience," said Vinod Nair, Head of Research at Geojit Financial Services.
From the Sensex pack, Power Grid, Mahindra & Mahindra, JSW Steel, HCL Technologies, Sun Pharma, Nestle, IndusInd Bank, Reliance Industries, Bharti Airtel and ITC were the major laggards. Tech Mahindra, Wipro, Bajaj Finance, State Bank of India, Bajaj Finserv, Axis Bank, Titan and ICICI Bank were among the major gainers.
"Caution prevailed in the market ahead of the RBI's monetary policy announcement, while weak European and Asian cues saw the local benchmarks linger in negative territory for the majority of the trading session. Listless trading could be seen till the MPC meeting outcome and global cues will continue to dictate trends in the local market," said Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd.
In the broader market, the BSE smallcap gauge climbed 0.25 per cent and midcap index gained 0.15 per cent. Among the indices, metal declined by 0.94 per cent, telecommunication fell by 0.92 per cent, utilities declined 0.60 per cent, commodities dipped 0.54 per cent, power (0.39 per cent) and energy (0.32 per cent). Financial Services, healthcare, industrials, bankex, capital goods and consumer durables were the gainers.
In Asian markets, Seoul, Shanghai and Hong Kong settled lower while Tokyo ended in the green. European markets were quoting in the negative territory. The US markets ended in positive territory on Monday. Global oil benchmark Brent crude fell 1.38 per cent to $84.16 a barrel. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,892.77 crore on Monday, according to exchange data.
"While global cues will continue to dictate trends, investors would be watchful of the two key catalysts - RBI's monetary policy and US inflation data on Thursday," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd. The BSE benchmark had climbed 232.23 points or 0.35 per cent to settle at 65,953.48 on Monday. The Nifty advanced 80.30 points or 0.41 per cent to end at 19,597.30.
