Benchmarks trade with minor cuts; European mrkt opens lower

The key equity barometers traded with minor losses in the afternoon trade. Domestic sentiments were dented amid negative global cues. Investors turned cautious ahead of Reserve Bank of India (RBI)`s policy announcement later this week. The Nifty slipped below 17,000 mark. Pharma, healthcare and auto shares advanced while PSU bank, oil & gas and metal stocks declined.

At 13:23 IST, the barometer index, the S&P BSE Sensex, was down 74.68 points or 0.13% to 57,032.84. The Nifty 50 index lost 20 points or 0.12% to 16,987.40.

In the broader market, the S&P BSE Mid-Cap index gained 0.23% while the S&P BSE Small-Cap index rose 0.28%.

The market breadth was positive. On the BSE, 1,694 shares rose and 1,615 shares fell. A total of 125 shares were unchanged.

The Reserve Bank of India (RBI)`s six-member Monetary Policy Committee meeting will begin today, 28 September 2022. RBI Governor Shaktikanta Das will announce the MPC decision on 30 September 2022, the last date of the meeting. The RBI is widely expected to maintain the balancing act between growth and inflation.

In the past three policy reviews, the RBI`s rate-setting panel has raised 140 basis points in total since May this year. Currently, the repo rate, the interest rate at which the RBI lends to the commercial bank, stands at 5.40%.

Gainers & Losers:

Sun Pharmaceuticals (up 2.52%), Eicher Motors (up 1.89%), Dr Reddy`s Laboratories (up 1.82%), Mahindra & Mahindra (up 1.71%) and Asian Paints (up 1.64%) were top Nifty gainers.

Oil & Natural Gas Corporation (ONGC) (down 1.97%), JSW Steel (down 1.96%), Reliance Industries (down 1.89%), ITC (down 1.70%) and Hero MotoCorp (down 1.68%) were major drags.

Stocks in Spotlight:

Larsen & Toubro rose 0.06%. The company said that the buildings & factories business of L&T Construction business has been awarded a significant contract from the State Government of Assam on an EPC basis. As per L&T`s classification, the value of the significant project is 1,000 crore to 2,500 crore.

Torrent Pharmaceuticals slipped 2.67%. The pharmaceutical company said that it has entered into definitive agreements to acquire 100% of Curatio Healthcare (Curatio) for Rs 2,000 crore. The consideration includes Rs 115 crore (on the date of signing) of cash and cash equivalents in the acquired business indicating an enterprise value of Rs 1,885 crore. The acquisition offers the pharma company the opportunity to enhance its presence in dermatology with a differentiated portfolio and is a strong strategic fit. The company will add a field force of 600 medical representatives and a distribution network of 900 stockists.

Power Grid Corporation of India rose 1.51%. The PSU company announced that its board approved the appointment of G. Ravisankar as chief financial officer (CFO) of the company with effect from 26 September, 2022.

Global Markets:

The Dow Jones index futures were down 149 points, indicating a negative opening in the US market today.

Shares in Europe and Asia tumbled on Wednesday as surging borrowing costs fed fears of a global recession.

Consumer inflation excluding fresh food is likely to rise this year, but the rate of increase will slow thereafter on energy prices, minutes from Bank of Japan`s July meeting said. A few members also said inflation, excluding fresh food and energy, is unlikely to reach 2% within its projection period.

Shaking investor confidence has been the collapse in sterling and UK bond prices, which could force some fund managers to sell other assets to cover resulting losses.

Global ratings agency Moody`s has warned the British government that plans for unfunded tax cuts could lead to larger budget deficits and higher interest rates, threatening the country`s credibility with investors. The agency said large unfunded tax cuts were "credit negative", leading to structurally higher deficits amid rising borrowing costs, a weaker growth outlook and acute public spending pressure.

U.S. stocks gave up early gains to fall deeper into a bear market on Tuesday as investors remained nervous about a potential global recession.

The Fed needs to raise interest rates by at least another percentage point this year, Chicago Fed President Charles Evans said on Tuesday.

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