The key Indian equity benchmarks are trading slightly lower in late morning trade with weakness in IT major Infosys and oil & gas giant RIL are countering gains in SBI and ITC. The undertone is cautious before the release of the March inflation numbers later today. The mood is also circumspect ahead of Tuesday's policy decision by the RBI. A weak external backdrop is adding to the list of domestic concerns, prompting investors to remain risk averse.
At 11:03 am ( IST), the BSE Sensex was 17,077, down 16 points over the previous close. It had earlier touched a day’s high of 17,107 and aday’s low of 17,010. It opened at 17,047.
NSE Nifty was quoting 5,183 down 3 points over the previous close. It has earlier touched a day’s high of 5,212 and a day’s low of 5,204. It opened at 5,190.
Maruti, Ranbaxy, ICICI Bank, RCOM, SBI, DLF, ITC,Tata Power, Cipla, were among the notable leaders in the Sensex and the Nifty.
RIL, Infosys, Wipro, TCS, ONGC, M&M,Bharti Airtel, NTPC, Jindal Steel, were among the notable losers in the Sensex and the Nifty.
The BSE Small Cap index and BSE Mid Cap index was trading up 1%.
PSU, Consumer Goods, HC, Power, Auto Consumer Durables, FMCG , Bankex, Realtyindices are the gainers.
Metal, Oil and Gas, Teck and IT indices are the losers.
The market breadth is positive as Small-Cap and Mid-Cap indices have managed to buck the negative trend in Large-Cap shares. The INDIA VIX is also up by more than 1% today.
Rate sensitive sectors of Real Estate and Banking have done well so far amid hope of a repo rate cut tomorrow. IT, Oil & Gas and Metals are the weak link for the market so far.
Defensive plays such as FMCG, Consumer Durables, PSU and Pharma are also witnessing select buying.
The rupee fell in opening trades today as a surge in Spanish yields revived worries over Europe's debt crisis, hurting risk appetite of global investors and clouding the outlook for capital flows into emerging markets.
The euro declined to a one-month low against the dollar before Spain auctions bills and bonds later today.
The 17-nation currency slid to its weakest versus the British pound since September 2010 after the cost of protecting Spain’s debt from non-payment climbed to a record.
China’s yuan fell versus the US dollar after the central bank doubled the so-called trading band of the currency.
The Australian dollar fell amid ongoing global risk aversion.
Five-year credit-default swaps linked to Spain’s bonds jumped to 502.5 basis points at the end of last week, the highest on record going back to October 2004.
The yuan weakened 0.3% to 6.3196 per dollar after the People’s Bank of China said on April 14 that the currency can move as much as 1% against the dollar from a so-called daily fixing rate, compared with the previous limit of 0.5%.
There is no certainty on what the RBI governor will do even as the shocking IIP numbers have increased hopes of a repo rate cut on Tuesday. IIP data spooked the markets and more or less vindicated the RBI governor who has dubbed it “analytically bewildering”. D. Subbarao may choose not to go with the popular sentiment in light of a string of macro-economic headwinds. The markets will of course rejoice if the RBI does lower its key lending rate. That decision in part will hinge on how the WPI data for March turns out today.
The opening today is likely to be lower due to continued selloff across global markets. US stocks notched their worst week of the year so far after consumer sentiment weakened while European indices slumped on worries about Spain's deteriorating fiscal health. Spanish stocks plunged to a three-year low. Disappointing Q1 GDP data from China added to the pain.
With the key Indian stock indices trading close to the 200-DMA levels, it would be prudent to remain cautious. On the daily charts, support of bearish triangle is placed at 5180 for the Nifty and any opening below it could aggravate the selling pressure. Therefore, we would advise caution for the time being.
India's deficits and short-term debt levels are disturbing, but it is not facing a repeat of a 1991 balance of payments crisis, the RBI governor Duvvuri Subbarao said on Saturday.
The Indian economy was far more resilient now and that the probability of an implosion was low, Subbarao said at a panel discussion attended by Prime Minister Dr. Manmohan Singh.
"There are serious concerns about the macroeconomy, about our policy environment, and about our governance," Subbarao said.
Raghuram G Rajan called on the Government to quickly reduce subsidies on domestic fuels to restore confidence in the economy.
The prime minister accepted that there were economic difficulties, but said they could be resolved with determination.
Meanwhile, the ministry of petroleum and natural gas has opposed a proposal of Reliance Industries Ltd for an increase in the price of gas.
Maruti Suzuki plans to invest Rs 20bn in diesel engine manufacturing facility at Gurgaon plant to meet the growing demand for Swift and Desire models.
Oriental Bank of Commerce has slashed fixed deposit rates by up to 0.5%.
The Centre for Monitoring Indian Economy (CMIE) has maintained its GDP growth forecast for FY13 at 7.6%, against the estimated 6.8% in FY12.
The CMIE has also said that the production of sugar will fall by 9.8% in FY13 due to lower availability of sugarcane.
State-owned oil companies have announced a reduction in jet fuel prices.
Key Results Today: Castrol India, CRISIL and Mindtree.
Trend in FII flows: The FIIs were net buyers of Rs 1.37bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers of ~Rs 4.79bn, as per the provisional figures released by the NSE.
The FIIs were net buyers of Rs 11.58bn in the F&O segment on Friday, according to the provisional NSE data.
The foreign funds were net buyers at Rs 1.84bn in the cash segment on Thursday, according to the SEBI figures. Mutual funds were net buyers at Rs 2.62bn on the same day.
Global Data Watch today: China FDI, UK Rightmove house price index, Eurozone trade balance, New York empire state manufacturing index, US retail sales, US business inventories, US NAHB housing market index and Federal Reserve official Bullard's speech.