Indices slip into the red

Key benchmark indices slipped into the red and traded with small losses in mid-morning trade as caution prevailed ahead of the Reserve Bank of India's monetary policy decision later in the day. At 11:20 IST, the barometer index, the S&P BSE Sensex, was down 15.94 points or 0.05% at 32,559.23. The Nifty 50 index was down 15 points or 0.15% at 10,099.65.

Indices opened higher and hit fresh record highs in early trade tracking firm Asian stocks. Market slipped into the red after hovering near the flat line in morning trade.

The S&P BSE Mid-Cap index fell 0.37%. The decline in the index was higher than the Sensex's fall in percentage terms. The S&P BSE Small-Cap index gained 0.13%, outperforming the Sensex.

The breadth, indicating the overall health of the market, turned negative from positive in mid-morning trade. On the BSE, 1,182 shares fell and 1,044 shares rose. A total of 149 shares were unchanged.

L&T declined 0.67%. The company announced that it has bagged a Rs 3375 crore order from Metro Express, which is owned by the Government of Mauritius to design and build an integrated light rail based urban transit system in the African island nation. The announcement was made during market hours today, 2 August 2017. The project is scheduled to be completed in 48 months.

IT stocks were mixed. Tech Mahindra (down 0.07%) and TCS (down 0.45%) declined. HCL Technologies (up 0.44%), Infosys (up 0.27%), and Wipro (up 0.36%) edged higher.

Realty stocks rose ahead of the Reserve Bank of India's policy meet announcement today, 2 August 2017. DLF (up 0.65%), Indiabulls Real Estate (up 1.33%), Unitech (up 0.01%), Godrej Properties (up 1.05%), D B Realty (up 0.12%), Housing Development & Infrastructure (HDIL) (up 1.29%), and Oberoi Realty (up 0.92%) edged higher. NBCC fell 0.05%. Purchases of both residential and commercial property are largely driven by finance.

On the macro front, the Reserve Bank of India (RBI)'s monetary policy meeting is scheduled at 14:30 IST today, 2 August 2017. RBI is likely to cut policy rates by 25 basis points. In June 2017, RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25%. Consequently, the reverse repo rate under the LAF remained at 6%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.5%.

Meanwhile, Arvind Panagariya, the first vice-chairman of Niti Aayog, reportedly announced yesterday, 1 August 2017, that he will step down from the post and return to academia in the United States. The decision is understood to have followed the economist having informed the government a couple of months ago that he would like to return to Columbia University.

The Government of India has garnered over Rs 1.8 lakh crore in direct tax till 15 July 2017 in the current FY 2018, representing a growth of 21.4% over the same period last year. The current growth rate is higher than the target rate of 15.32% required to achieve the budget estimate. Through direct taxes, the government aims to collect Rs 9.8 lakh crore in FY 2018.

Overseas, most Asian stocks rose helped by strong results from Apple. US stocks closed higher yesterday, 1 August 2017 and the Dow Jones Industrials Average racked up a fifth straight record high powered by Goldman Sachs, JPMorgan Chase and other banks.

Economic data showed US consumer spending barely rose in June as income failed to increase for the first time in seven months. Also, American manufacturers tapped on the brakes lightly in July but were still expanding near the fastest pace in three years. The Institute for Supply Management said its manufacturing index fell slightly to 56.3% last month after reaching a three-year high of 57.8% in June.

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