Weak Start To The Week; Bank Stocks Tumble

Indian share markets continued to witness selling pressure during the afternoon session ahead of inflation data due later in the day, while sentiment was cautious ahead of the US Federal Reserve policy meeting this week. Sentiments also remained weak amid weak international markets.

At the closing bell, the BSE Sensex closed lower by 166 points, while the NSE Nifty closed lower by 52 points. Meanwhile, the S&P BSE Mid Cap and the S&P BSE Small Cap finished down by 0.5% and 0.6% respectively. Losses were largely seen in capital goods stocks, bank stocks and consumer durables stocks.

Which Way Will Inflation Go?

The RBI’s status quo in the latest Monetary Policy review seems to have disappointed many. Especially the government. A rate cut may have underscored the government’s claims of revival in the economy. But unlike the new GDP and IIP data, the RBI’s monetary policy did nothing to support the claims. Also, while the RBI has lowered its inflation expectations, it maintains a hawkish stance.

Bank stocks fell as sentiment took a hit after Maharashtra agreed on Sunday to write off all loans availed by farmers.

SBI share price finished down by 1.2%, while Indian bank share price and Bank of Baroda share price fell 3.2% and 3.1% respectively.

Asian stock markets finished broadly lower today with shares in Hong Kong leading the region. The Hang Seng is down 1.24% while China’s Shanghai Composite is off 0.59% and Japan’s Nikkei 225 is lower by 0.52%. European markets too are lower today with shares in France off the most. The CAC 40 is down 0.79% while Germany’s DAX is off 0.62% and London’s FTSE 100 is lower by 0.21%.

The rupee was trading at Rs 64.34 against the US$ in the afternoon session. Oil prices were trading at US$ 45.95 at the time of writing.

As per an article in The Livemint, Oil and Natural Gas Corp (ONGC) is keen to acquire India’s third-biggest fuel retailer Hindustan Petroleum Corp Ltd (HPCL) in a Rs 422.5 billion deal after finding Bharat Petroleum Corp Ltd (BPCL) too expensive to buy.