After an early setback on the back of some selling in the banking space following the Reserve Bank of India hiking cash reserve ratio (CRR) on incremental deposits, the Indian stock market recovered lost ground to edge up marginally into positive territory Monday morning before retreating again. Despite positive global cues, the mood remains cautious amid concerns about near term liquidity in the economy.
The BSE benchmark Sensex, which recovered to 26,335.65 after having tumbled to 26,183.22 in early trades, is currently down 87 points or 0.33% at 26,229.34. The Nifty50 of the National Stock Exchange is down 28 points or 0.35% at 8086.30. Earlier, after declining to 8066.50, the Nifty had recovered to 8119.95.
Mirroring weakness in the banking space, the BSE Bankex is down 1.47% now, with all the constituents of the index trading in negative territory. Punjab National Bank, Bank of Baroda and State Bank of India are down 2.6% - 3%. Federal Bank is down nearly 2%, ICICI Bank and Yes Bank are lower by about 1.7%, Axis Bank, Kotak Bank and IndusInd Bank are trading 1.1% - 1.3% down and HDFC Bank is down marginally.
Oil stocks are higher. Shares of state-run oil marketing companies Hindustan Petroleum Corporation, BPCL and Indian Oil Corporation are up 2.7% - 3.4%. GAIL India is up 1.4%, Oil India is gaining 0.7%, Reliance Industries and IGL are up 0.5% and ONGC is up marginally.
Automobile stocks Hero Motocorp and Eicher Motors are up 1.6% and 1.3%, respectively. Ashok Leyland, Tata Motors and Bajaj Auto are up 0.6% - 1.1%, while Mahindra & Mahindra and Maruti Suzuki are trading weak.
In the telecom space, Bharti Airtel is rising 1.75%, Bharti Infratel is up 1.2% and Reliance Communications is advancing 0.7% and Idea Cellular is up 0.35%. Tata Communications is up marginally.
Power Grid Corporation is up 1.75%. Cipla, Asian Paints, Adani Ports, Sun Pharmaceutical Industries and NTPC are up 0.3% - 1.2%.
Tata Consultancy Services and Wipro are down 2% and 1.5%, respectively, while Infosys is trading 0.4% down. HCL Technologies and Tech Mahindra are also down in negative territory with modest losses.
On Saturday, the Reserve Bank of India asked banks to maintain incremental CRR of 100% on deposits received between September 16 and November 11 for the fortnight beginning Saturday. CRR, which is the portion of the deposits which banks are required to park to the RBI, stood at 4% earlier.
Banks, which saw in inflow of about Rs 3.5 lakh crore during the said period, will now have to maintain the amount as cash. They will have to pay at least 4% savings rate on these deposits, but will not get anything in return.