Indices flat even as market breath turns negative

After opening lower, Benchmark indices remain flat as investors choose to remain on the sidelines wary of the Federal Reserve Open Market Commite (FOMC) meeting which is set to start today. Market participants are also jittery owing to RBI credit policy review on Friday.

Risk appetite was fragile ahead of the Federal Reserve Open Market Commitee (FOMC) meeting starting from today which will be key in terms of any tapering of $85 billion monthly bond purchases that led to significant inflows in the emerging markets especially India so far.

Rate sensitives suchs as Banks and realty stocks are trading lower as investors remain cautious in wake of dissapointing WPI inflation numbers released yesterday, which came at a six-month high. August WPI inflation jumped to 6.1% vs 5.7% a month earlier.

 Deutsche bank says fears of foreign institutional investors' capitulation are receding as they have bought Indian shares worth $1 billion over the past eight sessions following Reserve Bank of India governor Raghuram Rajan's recent announcements.

"Recent announcements over the FCNR-B, supportive trade data and easing investment facilitation in debt markets have resulted in imparting long needed and much sought after credibility over both - the financing of the CAD and the actual CAD," says Deutsche bank in a report.

At 11:27AM, the 30-share Sensex fell 49 points to trade at 19692.49 and the 50-share Nifty dropped 21 points at 5,819 levels.

The broader market too remained under pressure as BSE small-caps and mid-caps stocks were trading down between 0.3-0.4%.

The market breadth turned negative. Out of 1895 stocks on the BSE, 744 stocks advanced while 1053 stocks declined.

RUPEE

The rupee lost some strength against the dollar in today’s early trades tracking the non-deliverable forwards (NDF) market and has so far continued to be subdued. The partially convertible rupee was trading at 63.54 per dollar against the yesterday’s close of 62.85 on the Interbank Foreign Exchange.

GLOBAL MARKETS

Asian markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is down 1.40% while the Hang Seng is off 0.37%. The Nikkei 225 is not trading.

STOCK MOVERS

Shares of gold finance companies such as Muthoot Finance and Manappuram Finance are trading lower by up to 10% on BSE after the Reserve Bank of India (RBI) tightened regulations governing non-banking finance companies (NBFCs) lending against gold jewellery.

Shares of Reliance Broadcast today hit upper ceiling of 5% on announcement that the company is mulling delisting from the bourses.

Shares of BGR Energy Systems and Accelya Kale Solutions are trading lower by over 5% each on turning ex-dividend today.