Markets snap 4-day Budget rally; Tata Motors down 2%

Benchmark indices opened on a softer note with a negative bias today after recording a Budget rally for four consecutive days, tracking mixed cues from global markets. Investors eye the RBI policy review meet beginning later today hoping for a cut in the interest rate on the backdrop of easing inflation and 3.2% fiscal deficit target.

 

At 11:40 am, the S&P BSE Sensex was trading at 28,363, down 76 points, while the broader Nifty50 was ruling at 8,776, down 25 points.

 

In the broader market, BSE Midcap and BSE Smallcap indices gained 0.3% and 0.4% respectively.

"Though medium term uptrend does not look affected, yesterday’s volatility has disturbed the short term strength. 8,770 region would be in sight, and a slippage below 8,730, while less expected add momentum to falls. On the other hand, medium shall continue to be intact, at present, retaining prospects of 8,900-9,000 upside objectives," said Geogit BNP Paribas in a note.

 

Meanwhile, Rupee yesterday ended at a nearly three-month high of 67.22 against the US dollar on Monday thanks to on sustained unwinding of dollars by exporters and corporates ahead of RBI policy. The currency opened at Rs 67.29/$ today.

 

On Monday, foreign portfolio investors (FPIs) sold shares worth a net Rs 403.52 crore, while Domestic institutional investors (DIIs) bought shares worth a net Rs 449.52 crore, provisional data available with BSE showed.

 

Sectors and Stocks

ITC, Tata Steel, Sun Pharma and Bharti Airtel were the top movers on BSE Sensex while Tata Motors, M&M, Bajaj Auto and ICICI Bank were the biggest laggards.

IDBI Bank fell 2% after the company said said it has reduced its marginal cost of funds based lending rate (MCLR) by 30-35 basis points across various tenors, effective February 1. 

ITC rallied as much as 5.6% to hit its 52-week high during the early morning trade after the Specified Undertaking of the Unit Trust of India (SUUTI) sold 2% stake in the company via block deals. The stock is currently trading 1.19% higher. 

Tata Steel was up around 1% as street awaits its Q3 earnings.

Cyrus Mistry removed from Tata Sons’ board of directors

 

Shareholders of Tata Sons, in an extraordinary general meeting (EGM) on Monday afternoon, voted to remove former chairman Cyrus Mistry as director of the company. The meeting took place at the Bombay House, the headquarters of the $103-billion group.

 

The meeting was attended by Tata Sons interim chairman Ratan Tata, N Chandrasekaran, who will take over as Tata Sons chairman on February 21, and other Tata Sons directors, including Ajay Piramal. Mistry did not attend the meeting. A one-line statement from Tata Sons said Mistry has been removed with a “requisite majority”, without giving any details. The EGM was called by the Tata Trusts, chaired by Tata.

 

Global Markets

 

Appetite for stocks and the euro ebbed on Tuesday as political and economic uncertainty sent investors sheltering in the Japanese yen and gold, while expectations China's foreign exchange reserves had fallen for a seventh month added to nervousness.

 

Asian peers Hang Shanghai and Shanghai were trading with a negative bias, down 0.03% and 0.04%, respectively

 

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed in early trade.

 

Japan's Nikkei dropped 0.6% as a stronger yen depressed stocks.

 

Overnight, both US and European stocks dropped.

 

Wall Street dipped as much as 0.2%, led lower by the energy sector as oil prices fell, with investors still waiting for details of President Donald Trump's economic policies.