Markets edge lower; India VIX spikes

Market continues to remain rangebound even as FMCG and Oil & Gas stocks tumble

Benchmark indices edged lower as profit booking in large cap stocks pulled indices lower. 

At 11:37 AM, the 30-share Sensex fell 110 points at 19,886 while the 50-share Nifty slipped 30 points to 5,866 levels. India VIX, the key gauge of market volatility, gained 2 per cent in the afternoon session.

Asian stocks continue to rise on Wednesday even as positive Chinese data showwed the economy grew and worries about U.S. military strikes on Syria receded.

Nikkei  225 is up 0.1%, while Hong Kong Hang Seng is down 0.29%.

Rupee weakened in early trade due to dollar buying by state-run banks to meet demand of importers.

At 11:45 am, the rupee was trading at Rs 63.92 compared with previous close of Rs 63.84 per dollar.

Meanwhile, Inflation likely edged up to a sixth-month high in August, driven by higher food prices and as the battered rupee made key imports such as fuel costlier, a Reuters poll found.

On the sectoral front, BSE FMCG, Consumer Durables, Power and Oil & Gas index have declined by 1%. BSE Capital Goods, Metal, Realty, Healthcare and Consumer Durables indices have gained between 0.5-1.4%.

The main losers on the Sensex at this hour include ONGC, HUL, Tata Motors, NTPC and ITC, all declining between 1-2%.

On the gaining side, Hindalco, Maruti Suzuki, Hero Moto, L&T and Tata Steel have gained between 2-3%.

Banking shares in focus on the bourses trading higher by up to 10% after the Reserve Bank of India (RBI) has allowed banks to borrow overseas up to 100% of their capital and swap it at a subsidized rate.

Most of public sector banks such as Uco Bank, Dena Bank, Oriental Bank of Commerce, Syndicate Bank, Bank of India and Union Bank of India are up 5-10% on BSE. Andhra Bank, United Bank of India, Indian Overseas Bank, Allahabad Bank and Central Bank of India are up 4% each.

Among other shares, PVR is trading higher by 7% to Rs 428 extending its 6% rise in past four trading day’s on the National Stock Exchange (NSE).

Wockhardt has surged nearly 16% to Rs 713, extending its past four days rally, on back of positive developments in the company.

The market breadth in BSE remains positive with 1,097 shares advancing and 806 shares declining.

Market regulator Securities and Exchange Board of India is planning to come out with notifications to minimise the know your customer (KYC) requirement for FIIs (foreign institutional investors) that have established a strong track record of compliance with Indian rules.

The Reserve Bank of India has allowed banks to borrow overseas up to 100% of their capital and swap it at a subsidised rate.

Larsen and Toubro (L&T) is trading higher by 3% at Rs 832 in otherwise weak market after Goldman Sachs added the stock to its conviction buy list.

Eros International has moved higher by 5% to Rs 138 after the company engaged in movies and entertainment business said its parent company, Eros International Plc filed updated registration statement with United States Securities and Exchange Commission for proposed initial public offer (IPO).