Spooked investors avoid taking risks ahead of RBI policy

Markets slumped for fourth straight session this Monday as investors braced for the central bank meeting with caution.

According to treasury executives and economists, the Reserve Bank of India might highlight risks from a fragile external sector and dwell upon a high current account deficit and imported inflation due to a weak rupee in its meeting tomorrow.

Trading was also on a cautious note ahead of the Federal Reserve, the European Central Bank and the Bank of England meet later this week.

Mirroring the concerns, the 30-share Sensex ended lower 154.91 points at 19,593.28 and the 50-share Nifty declined 54.55  points at 5,831.65  levels.

The Reserve Bank of India’s monetary policy tomorrow will be a key trigger for markets in terms of any cue on liquidity measures to support rupee.

The broader markets ended lower with mid-caps and small-caps falling over 1 per cent on the BSE.

The market breadth was negative. Out of 2,391 stocks traded, 1,400 stocks declined while 830 stocks advanced on the BSE.

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FIIs DATA

Overseas investors have pulled out nearly Rs 18,500 crore (about $ 3 billion) from the Indian capital markets so far this month, amid concerns over the US Fed policy and the depreciating rupee.

The outflows as of July 26 were about Rs 12,081 crore ($ 2 billion) from the debt market and Rs 6,394 ($ 1 billion) from equities, according to data on net FII investments with market regulator Sebi.

GLOBAL MARKETS

Asian stocks ended lower today. Japan’s Nikkei declined 3.4% to 13,661, Singapore Straits Times rose 0.03% to 3,236, China's Shanghai Composite index was down 1.7%  at 1,976 while Hong Kong’s Hang Seng was down 0.5% to 21,850 today.

European stocks advanced for the first time in three days as companies from Danone to Reckitt Benckiser Group reported better results. France’s CAC gained 0.35% to 3,982, Germany’s DAX rose 0.3% to 8,275 while UK’s FTSE was up 0.15% to 6,564.

RUPEE

The rupee was trading weak in late trades due to month-end dollar demand from importers.

At 4PM, the rupee was trading at Rs 59.30 compared with previous close of Rs 59.04 against the dollar.   

Last week the Reserve Bank of India (RBI) tightened the liquidity further in order to arrest the depreciating rupee. However, the impact of the moves was not very helpful in strengthening the rupee. 

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GAINERS/LOSERS

Among the key sectoral indices , FMCG, metal, PSU, realty, bankex, power indices dropped while auto sector gained on the BSE.

The gainers included counters such as Wipro surging 6%, Jindal Steel gained 5%, Sun Pharma rose 2%, Tata Motors and Hero MotoCorp gained 2.2% and 0.5% respectively  on the BSE.

The laggards were Hindalco and Sterlite Industries dropping 4% and  3.6% respectively, HUL  fell 3.7%, Coal India declined 3.2% while Dr Reddy’s shed 3.6% on the BSE.

STOCK MOVERS

Godfrey Phillips India surged 6.6% to Rs 2,783 after reporting more-than-double net profit before exceptional items at Rs 59 crore for the quarter ended June 30, 2013 (Q1) on back of healthy operational performance. The country’s second largest cigarette maker had a profit of Rs 28 crore during year ago quarter.

Force Motors rallied nearly 8% to Rs 267, in otherwise weak market, after reporting a strong 38% year-on-year (yoy) growth in net profit at Rs 14 crore for the quarter ended June 30, 2013 (Q1) on the back of robust operating performance. The company had reported a loss of Rs 23 crore in March quarter.

JK Cement shed 10.7% to Rs 181 after the cement maker  reported a sharp 55% year-on-year decline in its net profit at Rs 31 crore for the quarter ended June 30, 2013 due to lower realization and higher input costs. The company had posted profit of Rs 69 crore in year ago quarter.