Equity benchmarks turned volatile after early sell-off, with the NSE Nifty hovering around 8100 level. Banks and select technology stocks were under pressure while auto, healthcare, telecom and select healthcare stocks gained.
10:59 am Market Update: The Sensex was up 21.34 points at 26337.68 and the Nifty gained 6.80 points at 8121.10.
About 1457 shares advanced against 652 declining shares on the BSE.
10:50 am CRR hiked: RBI has raised CRR to 100 percent on incremental deposits, post a deluge of liquidity to the banking system due to demonitisation. The additional CRR is applicable on incremental deposit growth from September 26 to be reviewed periodically (every fortnight), but with a likely influx of liquidity continuing, it seems that it would continue beyond the near term and possibly over next 3-4 months. The CRR hike for now would reduce the market liquidity by Rs 3-3.5 trillion and will suck out more as deposit influx increases, says Deutsche Bank.
10:40 am IPO this week: Sheela Foam, which makes mattresses under Sleepwell brand, will launch its initial public offer this week to raise Rs 510 crore.
Sheela Foam had filed draft papers with Sebi in July and received the market regulator's approval earlier this month.
The company has fixed the price band at Rs 680-730 for the offer, which will remain open to bidding from November 29-December 1.
Edelweiss Financial Services and ICICI Securities are the book running lead managers to the issue.
Sheela Foam manufactures foam-based home comfort products like mattresses, furniture-cushioning, pillows, cushions and sofa-cum-beds.
10:20 am FII View: Markus Rosgen of Citi says Asian markets look attractively valued. Mean-reversion on valuation over the next five years would deliver an annual return of 8.9 percent.
He further says earnings in the region are recovering, most evidently in the cyclical markets of North Asia, as is liquidity. Sentiment remains too negative and investors are sheltering in the more defensive ASEAN and India markets.
By contrast, he advocates a more pro-cyclical, pro-value stance, and favoured markets are Korea, Singapore and Taiwan.
Sector-wise, he is overweight on technology, materials, banks and consumer discretionary.
While he likes risk as an investment factor, he acknowledges it could backfire on trade frictions, more political upsets and a stronger USD in 2017.
With valuations 0.5 standard deviation below mean, though, Asia ex-Japan looks to be pricing in too fearful an outlook, Rosgen says.
Also read - See Nifty in 7600-8500 range; stagger buying midcaps: Udayan
10:00 am Market Check: Equity benchmarks turned volatile after early sell-off, with the NSE Nifty hovering around 8100 level. Banks and select technology stocks were under pressure while auto, healthcare, telecom and select healthcare stocks gained.
The 30-share BSE Sensex was down 58.28 points at 26258.06 and the 50-share NSE Nifty fell 14.35 points to 8099.95 while the broader markets outperformed.
The BSE Midcap and Smallcap indices gained half a percent each on positive breadth. About two shares advanced for every share declining on the BSE.
Liquor stocks like Globus Spirits, United Spirits, GM Breweries and Som Distilleries surged 3-14 percent while aviation stocks like InterGlobe Aviation, Jet Airways and SpiceJet gained 1-5 percent.
Banks are still under pressure, though these stocks recovered a bit from day's lows. ICICI Bank, Bank of Baroda, SBI, PNB, Kotak Mahindra Bank, Bank of India and Axis Bank were down 1-3 percent.The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .