Nifty hovers around 7800, Sensex still in red; bank, IT drag

Moneycontrol Bureau 10:55 am PMI: Growth in India's manufacturing sector slowly sharply in April as demand weakened, a business survey showed on Monday, reinforcing views that the central bank will have to cut interest rates again in coming months.

The Nikkei/Markit Manufacturing Purchasing Managers' Index fell to a four-month low of 50.5 in April from March's 52.4, nearing the 50 mark that separates growth from contraction and the lowest reading of the year.

The pace of growth in both domestic and foreign orders dwindled, pushing firms to reduce output. The output sub-index fell to a two-month low of 51.0 from 54.2.

"The PMI data for India show a marked slowdown in output expansion during April, as growth of new work ground to a halt," said Pollyanna De Lima, an economist at Markit.

10:45 am PSB funding: Several public sector banks including SBI are yet to raise funds totalling over Rs 22,000 crore from markets, for which they were granted permission by the government way back in December 2014.

The total amount of funds yet to be raised by the state-run banks to shore up their capital requirements stands at Rs 22,257 crore, Finance Ministry said in reply to a Parliament question on Friday.

The Ministry did not mention the cut-off date.

Among the larger banks, SBI was granted permission in 2014 to raise Rs 15,000 crore from the markets. The bank, however, is yet to raise this capital.

10:30 am Market outlook: Weak global and domestic cues could push the Sensex back to its 22,000 mark by FY17-end, says Saurabh Mukherjea, CEO, Institutional Equities at Ambit Capital. “India is not an easy market to invest it,” he says. Widening stress in the banking sector, sluggish economic indicators as well as central banks commentary is indicating a difficult time ahead. Mukherjea advises investors to remain cautious and use decent earnings to book profits as and when possible, especially in cyclical names.Don't miss: New bankruptcy code may take yrs to clean up debt messThe Sensex is down 167.39 points or 0.65 percent at 25439.23, and the Nifty is down 44.15 points or 0.56 percent at 7805.65. About 851 shares have advanced, 919 shares declined, and 87 shares are unchanged. ICICI Bank, NTPC, Adani Ports, Bharti Airtel and Dr Reddy's Lab are the top losers, while Hindalco, Cipla, Reliance Industries, Lupin, Coal India and Aurobindo Pharma are top gainers.Brokers said sentiment dampened following a 3.62 percent plunge in Tokyo equities, as a sharp rise in yen hit exporters, leading to a sell-off across Asia in holiday- thinned trade and on global economy worries-fuelled sharp losses in Wall Street and Europe on Friday. Besides, a cautious approach adopted by investors ahead of quarterly earnings from more blue-chips including HDFC Ltd and Hero MotoCorp, too influenced sentiment, they added.