After a sharp rally on Friday, Indian markets have been relatively flat this week. The Sensex has hardly moved so far this month and was up a mere 0,08 percent in June Today too the markets open flat, with the Sensex down 11 points at 17449 levels and the Nifty down 4 points, just below the 5300 mark as the regional peers are trading mostly in red and the monsoon concern continue to weigh. 18 components are trading in red. The BSE bankex is down 0.4 percent in opening trade, auto index is down marginally; rate-sensitive sectors are leading losers this morning.
Shares of ICICI Bank, Bajaj Auto, L&T, ONGC, TCS, SBI, Tata Steel, Dr Reddy’s Labs, Wipro and GAIL were under pressure. However, ITC, Tata Motors, HUL, Sterlite, JSPL, Hindalco, M&M and BHEL gained.
The rupee fell in opening trade to as low as 55.07 to the dollar, tracking a weak euro ahead of the European Central Bank policy meeting and weaker Asian shares. Weak investor response at an auction for debt limits for foreign institutional investors (FII) on Wednesday also weighed on sentiment, dealers said. At 9.11 a.m, the rupee was at 54.98/00 dollar versus its 54.48/49 close on Wednesday.
Even RBI has said that its policy action in the forthcoming quarterly review this month-end will depend upon the progress of monsoon and it would rely on the Meteorological Department for forecast.
Globally investors await the outcome of monetary policy meetings in Europe and the UK. Market participants will also examine US data on weekly jobless claims, ADP private sector employment and ISM service sector PMI before Friday’s crucial monthly payroll report. Calls for QE3 from Bernanke & Co. may get shriller if this week’s jobs data turns out to be weak. Meanwhile, the IMF has warned the US on adverse repercussions of the so-called “fiscal cliff” next year.
Domestically, the IT sector is likely to remain in somber mood with US government’s decision to stick by the onshore model for two new projects; however president of NASSCOM Som Mittal has said that this change in trend does not necessarily have a huge adverse impact on Indian I-T companies.
Meanwhile, there is good news for the iron ore industry as eight Karnataka iron ore mines will resume operations by the end of July, possibly adding around 5.5 million tonnes per annum (mtpa) and easing some supply constraints.
Realty stocks are likely to remain buzzing as the Union cabinet has approved the extension to the home loan subsidy.
Stocks in news
Reliance Industries is down half a percent as the Director General of Hydrocarbons has reportedly rejected the Coal Bed Methane gas price proposed by Reliance Industries, saying the process followed was not in conformity with oil ministry guidelines.
Mahindra & Mahindra is up 0.77 percent as the auto maker is considering bidding for a bankrupt aircraft maker called Hawker Beechcraft, which is part owned by the Goldman Sachs Group.
KEC International soars 4.8 percent on securing new order worth Rs 795 crore spread across its transmission and power systems businesses.
Infosys has reorganised its sales structure and identified 50 major ‘star’ clients that have the potential to generate revenues of $100 mn.But the stock is down marginally in trade today.