Sensex, Nifty ranged; Axis Bank top loser, Ashok Leyland down 4%

Moneycontrol Bureau11:40 am FII View: Herald Van Der Linde of HSBC said while risk to Asian equities from earnings was falling, new risks are emerging with the steeper US yield curve.

Generally Asian equities do not perform well in such an environment. The markets that have historically been most sensitive to this are Indonesia, the Philippines and Thailand. China, Singapore and Taiwan have tended to do better.

Hence, the brokerage house feels Asian equities tend to perform poorly in times of steeper yield curves but believes their long-term story remains intact.

HSBC has maintained overweight rating on Indian equities and believes that the August CPI print of 5 percent marks the start of a prolonged period (approximately a year) in which CPI inflation is likely to trend at or below 5 percent.

"This makes us believe that there is room for a 50 bps rate cut, which would further support our case to be overweight on India," Herald said.11:25 am Rupee devaluation likely?: The Commerce and Finance ministries are likely to discuss a possible devaluation of the rupee at a meeting next week, according to a government official who did not wish to be quoted, reports CNBC-TV18. The Commerce Ministry is in favour of a 'calibrated' devaluation of rupee as it feels current rupee level does not reflect market dynamics, the official said. The ministry believes rupee's real effective exchange rate is overvalued against several emerging market economies, the official added.The ministry feels that rupee devaluation is a must for export competitiveness, the official said.Also read - Subdued monsoon not to hurt rural economy: Kotak's Sanjeev Prasad11:00 am Market Check

Equity benchmarks remained in rangebound in morning trade with the Nifty hovering around 8725 level. Gains in FMCG, pharma, HDFC group stocks offset by fall in banks, select auto & infra stocks.

The 30-share BSE Sensex was up 8.52 points at 28380.75 and the 50-share NSE Nifty fell 1.65 points to 8724.95. About 1264 shares advanced against 899 declining shares on the BSE.

Hinduja Foundries was locked at 20 percent lower circuit and Ashok Leyland fell 4 percent on merger plan.Cipla, ITC, HUL, Sun Pharma, Maruti Suzuki, Aurobindo Pharma and Zee Entertainment were gainers while Axis Bank, Hero Motocorp, Tata Steel, L&T, ICICI Bank, Yes Bank and Bank of Baroda were losers.