FII sell-off, global woes drag Nifty below 7,800; RBI policy eyed

Markets kicked off the October series on a weak note as participants remained edgy ahead of the fourth bi-monthly monetary policy review for the year 2015-16 slated tomorrow amid persistent sell-off by the foreign investors. Meanwhile, losses in the global peers on caution ahead of the US jobs data due to be unveiled later during the week further dampened sentiment.

The Sensex dropped 185 points to close at 25,678 and the Nifty lost 52 point to end at 7,816. In the broader market, the BSE MidCap index and SmallCap index ended 0.2% lower. Market breadth ended negative with 1,138 gainers and 1,588 losers on the BSE.

The rupee was trading higher by 7 paise at 66.08 against the US currency on bouts of dollar selling by banks and exporters.

On the sectoral front, 9 out of 12 indices ended in red with BSE Auto, Capital Goods, Metal and IT indices losing up 2.6%.

Dr Reddy's Labs surged 5.5% after the drug maker announced the launch of Esomeprazole Magnesium Delayed-release capsules, which is the generic version of AstraZeneca's Nexium, in the US market while Lupin gained 2%.

However, Sun Pharmaceutical lost 4% after the US Food and Drugs Administration (USFDA) withdrew an approval granted in March to SPARC’s anti-epileptic drug due to regulatory compliance issues at Sun Pharma's Halol plant.

Banks ended mixed ahead of the RBI fiscal policy where the Reserve Bank of India (RBI) is likely to announce measures to enhance commercial banks' ability to recover loans to borrowing entities which are under stress primarily due to operational/managerial inefficiencies of the existing promoters. In the banking space, ICICI Bank and Axis Bank lost between 0.3-1.3%. However, HDFC bank and SBI gained 0.2%. Among the realty majors, HDIL, Sobha Realty, Mahindra Lifespace and Prestige Estates, DLF and Prestige Estates climbed between 1-5%. 

Select IT shares ended down amid an appreciating rupee. Infosys and Wipro lost 2.8% and 1.6%  each.

Metal shares continue to trade lower on growth concerns in the world’s second largest economy, China. Vedanta, Tata Steel and Hindalco slumped between 1-4.5%.

Global markets were trading mixed with shares in Japan easing after recent gains. The benchmark Nikkei ended down 1.3% while Shanghai COmposite was up 0.3% and Hang Seng gained 0.4%.

European stock markets kicked off the week in negative territory on Monday, with trading sentiment hurt by another weak data release from China and a continued slide AFTER after data showed China's industrial profits fell 8.8% in August indicating that the economic slowdown in China has started affecting the corporate profits.


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