Sensex Opens Flat; Realty & Bank Stocks Lose

Asian stock markets opened in red today after a new round of US-China trade tariffs kicked in. Meanwhile, the S&P 500 and the Dow closed lower on Monday as market participants awaited a widely-expected interest rate hike by the Federal Reserve. While oil prices jumped after top producers including Russia ruled out boosting crude output.

Back home, India share markets opened flat. The BSE Sensex is trading down by 50 points while the NSE Nifty is trading down by 30 points. The BSE Mid Cap index and BSE Small Cap index opened the day down by 0.4% & 0.7% respectively.

Barring healthcare stocks, capital goods stocks and energy stocks, all sectoral indices have opened the day in red with bank stocks and realty stocks witnessing maximum selling pressure.

The rupee is trading at Rs 72.98 against the US$.

In the news from the economy. As per an article in a leading financial daily, the Reserve Bank will conduct open market operations (OMO) on Thursday to purchase government bonds to infuse liquidity of Rs 100 billion.

Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of government securities under OMO.

The purchase will happen through multi-security auction using the multiple price method, the reports noted.

As part of the OMOs, the RBI will purchase government securities maturing in 2020 bearing interest rate of 7.8%, 2022 (8.2%), 2025 (7.72%), 2027 (6.79%) and 2031 (6.68%).

The RBI said it has the right to decide on the quantum of purchase of individual securities and can also accept offers for less than Rs100 billion.

Note that, OMOs are the tools which can be used to either inject or drain liquidity from the system. It is employed to adjust rupee liquidity conditions in the market on a durable basis.

The RBI and capital markets regulator on Sunday said they were closely monitoring activities in the financial markets and ready to take appropriate actions, if required, following a sharp meltdown on Friday in equity and debt markets.