Sensex, Nifty, Midcap hold early gains; Rajan's move eyed

Moneycontrol Bureau10:40 am Interview: Dismissing talks of a possible takeover of Dhanlaxmi Bank, Managing Director and Chief Executive G Sreeram, said that the bank is looking for capital infusion of about Rs 100-150 crore. In an exclusive interview to CNBC-TV18, Sreeram said that the bank is in talks with players in the market to raise capital.He said that the capital will be raised through fresh issues and expects the fundraising to be completed within a month. He added the bank is in advanced talks with investors to raise the amount. Even existing investors intend to increase their stake in the bank, he said.Commenting on the performance of the bank in the March 2016 quarter, Sreeram said one-time provisions impacted its capital to the tune of Rs 90 crore and he expects the bank to post good numbers in the quarters to come by in FY17.10:20 am FII View: Brexit might trigger volatility in the currency markets rather than the equity markets, said Andrew Holland, CEO of Ambit Investment Advisors. Brexit will have tax implications for the UK, Europe and other countries may start thinking about exiting. It may largely have tax implications among members of European Union and may influence them to think about exiting, he added. While negative global factors are ebbing away, a good monsoon is the only key move for the markets to move higher and consolidate, he told CNBC-TV18. However, if monsoons fail, he is of the view that the government will have to interfere with fiscal deficit and increase expenditure, which the investors will not like.Meanwhile, earnings momentum will continue to remain the catalyst for Indian equity markets.Also read - Most likely timing for next rate hike by Fed is Sep, says Nomura10:00 am Market Check

Equity benchmarks as well as broader markets maintained early gains as investors are eagerly waiting for the RBI monetary policy review. Majority of economists expect Governor Raghuram Rajan to keep rates unchanged but the commentary will be closely watched."RBI policy actions would continue to be guided primarily by domestic inflation. Further rate cuts by the RBI can be expected only after a clearer picture of the monsoons and oil price level emerges. The RBI is also waiting for the passage of key global events viz. the US Federal Reserve’s interest rate action and the Brexit referendum (Britain’s exit from the European Union) and the resultant volatility in domestic markets to make its policy moves," CARE said in its note.

The Sensex rose 84.31 points to 26861.76 and the Nifty climbed 26.05 points to 8227.10. The market breadth was positive as about two shares advanced for every share declining on Bombay Stock Exchange.ICICI Bank, SBI, HUL, Maruti Suzuki, ONGC and Hero Motocorp topped buying list on Sensex, up 1-2 percent while HDFC, Lupin, Infosys, Adani Ports and Dr Reddy's Labs fell.