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Markets subdued on lacklustre PMI data, ahead of RBI policy

Foreign portfolio investors (FPIs) bought equities to the tune of Rs 2,354 crore on Monday, as per provisional data released by the stock exchanges.

By: ENS Economic Bureau | Mumbai | Updated: June 6, 2018 1:00:54 am
Markets subdued on lacklustre PMI data, ahead of RBI policy Interest rate-sensitive realty, banking and auto stocks remain under pressure.

Stock markets on Tuesday declined further for the third straight session as investors remained on the sidelines ahead of the Reserve Bank of India’s monetary policy decision with lacklustre PMI data, which showed that India’s services activity contracted for the first time in three months in May affecting the sentiment. The index which declined 109 points on Tuesday, has now lost 419.17 points in three sessions amid concerns over a rate hike by the RBI.

The 30-share Sensex stayed in the negative terrain for most of the session, touching a low of 34,784.68. It finally finished at 34,903.21, down 108.68 points or 0.31 per cent. The broader NSE Nifty too dropped by 35.35 points, or 0.33 per cent, to end at 10,593.15, after moving between 10,633.15 and 10,550.90.

Dealers said interest rate sensitive realty, banking and auto stocks remained under pressure. The RBI’s Monetary Policy Committee which is scheduled to announce the outcome of the second bi-monthly monetary policy meeting of 2018-19 on Wednesday is likely to increase the repo rate by 25 basis points and change the stance to hawkish. The rupee weakened further against the US dollar in choppy trade, falling by another 4 paise to end at 67.15 ahead of the RBI policy outcome.

Foreign portfolio investors (FPIs) bought equities to the tune of Rs 2,354 crore on Monday, as per provisional data released by the stock exchanges.

“Consolidation continued as investors turned cautious ahead of the RBI monetary policy and rupee is marginally weak due to liquidity constraint. Investors are expecting a status quo on policy rates, but RBI’s commentary would be keenly watched. The elevated levels of crude will influence RBI’s stance on inflation. Earnings cycle is yet to pick up while the divergence in expectation and actual results could trigger downgrades in FY19 estimates,” said Vinod Nair, Head of Research, Geojit Financial Services.

Coal India topped the losers’ list in the Sensex pack today, falling 2.36 per cent, followed by Bharti Airtel at 2.16 per cent. Among BSE sectoral indices, telecom fell 3.08 per cent, capital goods 1.96 per cent, infrastructure 1.72 per cent, teck 1.58 per cent, IT 1.52 per cent, healthcare 1.40 per cent, consumer durables 1.38 per cent, power 1.32 per cent, realty 1.03 per cent, PSU 0.63 per cent, FMCG 0.53 per cent, metal 0.39 per cent, auto 0.35 per cent and bankex 0.22 per cent. Oil and gas index ended higher by 0.10 per cent.

However, sugar stocks rallied by up to 3 per cent gains in anticipation of the government announcing a bailout package for cash-starved mills to clear dues to farmers. Shares of Dhampur Sugar Mills rose 3.24 per cent, Balrampur Chini Mills (3.14 per cent), Mawana Sugars (2.14 per cent), Uttam Sugar Mills (1.63 per cent), Avadh Sugar & Energy (0.48 per cent) and Bajaj Hindusthan Sugar (0.28 per cent) on the BSE. The government will soon announce a bailout package of Rs 8,000 crore to sugar industry to ensure the cash-starved mills clear cane dues of Rs 22,000 crore, Food Minister Ram Vilas Paswan had said.

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