Nifty opens below 7850, Sensex falls over 150pts; Maruti down 2%

Moneycontrol Bureau9:55 am Opinion: Merger between state-run giant State Bank of India and its five associate banks, along with Bharatiya Mahila Bank, will have a positive impact on the bank, said Manish Agarwalla, Co-Head of Research at Phillipcapital.In an interview to CNBC-TV18, Agarwalla said the gross non-performing assets (NPA) percentage will remain the same. However, major drawbacks would be the stress is asset quality of the SBI Group post the merger and a surge in employee costs, he added. He has a buy call on the stock for long-term investors.9:45 am Result estimate: Punjab National Bank (PNB) is likely to see loss of Rs 53 crore in January-March quarter (against profit of Rs 307 crore in year-ago period) due to continued clean up of balance sheet, according to CNBC-TV18's consensus estimates. Net interest income, the difference between interest earned and interest expended, may grow 10.2 percent year-on-year to Rs 4,177 crore in quarter gone by. Overall its asset quality performance is likely to be weak as analysts expect slippages to remain elevated. Analysts say credit cost is also expected to remain elevated on account of stressed assets addition.9:34 am Market check: The Sensex is down 187.06 points or 0.7 percent at 25586.55, and the Nifty down 53.95 points or 0.7 percent at 7836.80. About 591 shares have advanced, 751 shares declined, and 58 shares are unchanged.

GAIL, ONGC, NTPC, SBI and Reliance are top gainers while Maruti, BHEL, ICICI Bank, Hero and Tata Motors are losers in the Sensex.

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The market has opened lower with the Nifty below 7850. The 50-share index is down 44 points or 0.6 percent at 7846.75. The Sensex is down 151.35 points or 0.6 percent at 25622.26. About 204 shares have advanced, 276 shares declined, and 36 shares are unchanged.

Coal India, HUL, M&M are top gainers while ICICI Bank, Infosys, Tata Motors, GAIL and BHEL are losers in the Sensex. SBI is down 1 percent. The state-run giant State Bank of India will merge its five associate banks, along with Bharatiya Mahila Bank, with itself.

In a press release, SBI said its board has given in-principle approval for the bank to discuss the possibility of acquiring its associate banks.

The five associate banks are State Bank of Travancore, State Bank of Hyderabad, State Bank of Mysore, State Bank of Bikaner and Jaipur and State Bank of Patiala. The BMB was created in 2013 by the erstwhile UPA government, especially to cater to women's lending needs but analysts say it has failed to take off.

The Indian rupee opened at 2 months low at 66.95 per dollar. It has opened lower by 8 paise against previous close of 66.87. Bansi Madhavani of India Ratings said, "An uptick in US retail inflation along with firming up of oil prices have rekindled rate hike fears across markets."

The US dollar dipped against a basket of major currencies after US Inflation data failed to convince currency traders that the Federal Reserve was moving closer to another interest rate hike.

Asia markets opened lower, with Japan's shares wavering as traders struggled to interpret data showing the country's economic growth beat expectations.Wall Street sold off as investors boosted their bets on the Federal Reserve raising rates later this year, while Home Depot dragged on indexes following its quarterly report.US consumer prices recorded their biggest increase in more than three years in April as gasoline and rents rose. The data pointed to a steady inflation build-up that could give the Fed ammunition to raise interest rates later this year.