Sensex holds 26,800 amid rangebound trades

Markets are trading with modest losses after rising for two days in a row as investors engage in profit booking in the recent gainers at attractive and higher valuations. Meanwhile, caution continues to envelop the D-Street ahead of the UK referendum on whether to stay in the European Union due on Thursday.

However, latest Foreign Direct Investment (FDI) regime for a host of important sectors including defence, civil aviation and pharmaceuticals along with advancement of monsoon rains capped the downside.

At 14:57 pm, the S&P BSE Sensex was down 63 points at 26,804 and the Nifty50 was trading 21 points lower at 8,218.

GLOBAL MARKET

Asian shares closed mixed as investors take a breather after a rally triggered by growing expectations that British voters will choose to remain in the European Union in the referendum due on Thursday.

Japan’s Nikkei, Hong Kong’s Hang Seng gained between 0.8%-1.5% while Singapore’s Straits Times and China’s Shanghai Composite lost between 0.2%-0.4%.

European shares were trading flat after profit booking post sharp gains in the previous session capped further upside. In the previous session, European shares surged after fears of Britain exiting the European Union receded. The CAC-40, DAX and FTSE-100 were trading 0.1% higher.

STOCKS

Auto stocks rose in a weak market on hopes that above normal monsoon would drive demand for two-wheelers and tractors among others.

Auto stocks were trading higher with Bajaj Auto up 1% on reports that the company plans to increase its market share by launching new motorcycle models over the next few months.

Mahindra & Mahindra was also up 1% on hopes of good tractor sales on the back of above normal monsoon. The company had sold 22,148 tractors in May 2016 compared with 18,245 units in May 2015.

Among other auto stocks, Hero MotoCorp, Maruti Suzuki and Tata Motors were up between 0.2%-0.7%.

IT shares which gained in the previous session amid a weakening rupee were down on profit taking. Infosys and TCS were down 0.3%-0.6% each.

The government on Monday announced a slew of reforms relating to foreign direct investment and easier terms for investors in sectors ranging from civil aviation to pharmaceuticals. In the aviation segment, Jet Airways, SpiceJet and IndiGo which shot up in the trade yesterday were down between 0.3%-1% on account of profit booking.

Hindalco gained 2% extending its past one month rally, after the company reported better-than-expected results for the quarter ended March 2016 (Q4FY16).

The initial public offer from Mahanagar Gas (MGL) for 2.46 crore shares opens today. The issue will close on Thursday, 23 June 2016. The price band for the issue has been fixed at Rs 380 to Rs 421. The IPO includes offer for sale of upto 1.23 crore shares by GAIL (India) and upto 1.23 crore shares by BG Asia Pacific Holdings PTE Ltd (BGAPH). Meanwhile, the company on Monday raised Rs 309 crore from nearly two dozen anchor investors.

Most of the telecom operators have shown improvement in network performance although Airtel, Vodafone, Reliance, Aircel and Idea need to better their call drop rate performance in Delhi-NCR, Trai said on Monday. Reliance Communications was up 1% while Bharti Airtel and Idea Cellular were marginally down.

Bank stocks are mixed after the finance ministry in its quarterly revision on interest rates on small savings schemes kept the rates unchanged for Q2 September 2016. ICICI Bank was up 0.3% while SBI, Axis Bank and HDFC Bank were trading lower up to 1%.