Sensex slips 73.38 points to 40,371.77, Nifty falls 26 points in early deals; Bajaj Finance biggest loser; Maruti, Vedanta rally

The equity benchmark BSE Sensex on Monday fell over 70 points in early trade, dragged mainly by losses in financial and banking stocks amid persistent foreign fund outflows.

Representational image. Reuters.

The 30-share index was trading 73.38 points or 0.18 percent lower at 40,371.77 in morning trade; while the broader Nifty was trading 26.10 points or 0.22 percent down at 11,895.40.

In the previous session, Sensex settled at 40,445.15, down 334.44 points or 0.82 percent, according to a PTI report. Likewise, the 50-share Nifty shed 96.90 points or 0.81 per cent to close at 11,921.50.

Bajaj Finance was the biggest loser in the Sensex pack with a decline by 1.28 per cent in morning deals, followed by HUL, ITC, SBI, Kotak Mahindra Bank, Tech Mahindra, TCS and Axis Bank.

On the other hand, Maruti, Vedanta, Tata Steel, HDFC, Tata Motors and Sun Pharma emerged as the gainers, rising up to 1.72 percent.

Foreign institutional investors (FIIs) offloaded shares worth Rs 867.66 crore in the capital market on Friday, while domestic institutional investors purchased shares to the tune of Rs 210.72 crore, data available with stock exchange showed.

Rupee slips 7 paise to 71.27

The Indian rupee opened on a cautious note and fell 7 paise to 71.27 against the US dollar in early trade on Monday tracking muted opening in domestic equities and sustained foreign fund outflows.

At the interbank foreign exchange, the rupee opened at 71.24 then fell to 71.27 against the US dollar, showing a decline of 7 paise over its previous closing.

The Indian rupee on Friday had closed at 71.20 against the US dollar, according to a PTI report.

Traders were also awaiting fresh cues on the potential US-China trade deal.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 867.66 crore on Friday, as per provisional data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.01 per cent to 97.71.

The 10-year government bond yield was at 6.68 percent in morning trade.

Asian stocks edge higher

Asian stocks edged up on Monday, catching some of Wall Street’s momentum after surprisingly strong US jobs data although regional gains were capped by concerns about China’s economy due to the prolonged Sino-US trade war, according to a Reuters report

Japan’s benchmark Nikkei advanced 0.3 percent while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3 percent, with Australian stocks and South Korea’s Kospi up 0.2 percent and 0.6 percent, respectively.

The modest Asian gains compared with Wall Street, which rose to near-record highs on Friday on a strong jobs report and some sign of optimism about US-China trade talks, with the benchmark S&P 500 closing within 0.2 percent of its peak set in late November.

US job growth increased by the most in 10 months in November as the healthcare industry boosted hiring and production workers at General Motors returned to work after a strike, in the strongest sign that the economy is in no danger of stalling.

“This economy is still climbing and shattering the records for longevity,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “Right now, the clouds of recession still remain well offshore despite troubled economies elsewhere in the world and a trade war.”

Top White House economic adviser Larry Kudlow said on Friday that a 15 December deadline is still in place to impose a new round of U.S. tariffs on Chinese consumer goods, but President Donald Trump likes where trade talks with China are going.

Still, investors think things could change if trade tensions escalate further, especially if Trump goes ahead with planned tariffs on some $156 billion worth products from China from mid-December.

The market has been largely working on the assumption that those tariffs, which cover several consumer products such as cellphones and toys, will be dropped or at least postponed, given that Washington and Beijing agreed in October to work on a trade deal.

Meanwhile, China’s exports shrank for the fourth consecutive month in November, underscoring persistent pressures on manufacturers from the prolonged trade war, although growth in imports may be a sign that Beijing’s stimulus efforts are working.

US Treasury yields climbed after the strong employment report, with benchmark 10-year notes rising to 1.843%.

The Fed’s Open Market Committee (FOMC) kicks off its two-day policy meeting on Tuesday. The central bank is expected to highlight the economy’s resilience and keep interest rates on hold in the range of 1.50% to 1.75%.

Analysts said Friday’s much better-than-expected jobs report offset mixed signals from recent economic data and validated the Federal Reserve’s wait-and-see stance on interest rates after three “insurance cuts” this year.

Oil prices retreated but hovered near recent peaks after OPEC and its allies agreed to deepen output cuts by 500,000 barrels per day in early 2020.

US West Texas Intermediate (WTI) crude slipped 0.4% to $58.94 per barrel, still not far from Friday’s 2 1/2-month high of $59.85 per barrel.

In the currency market, the dollar maintained a firm tone on Monday, with the dollar index against a basket of major currencies standing at 97.691 and the euro changing hands at $1.1058, both little changed on the day.

Against the Japanese yen, the dollar was last traded at 108.59 yen, flat on the day.