Indian shares edged lower on Monday, snapping three days of gains, as caution prevailed a day before the central bank's decision on policy rates and ahead of a number of global risk events this month, including a US Federal Reserve meeting.
The 30-share BSE index Sensex was down 65.58 points or 0.24 per cent at 26,777.45 and the 50-share NSE index Nifty was down 19.75 points or 0.24 per cent at 8,201.05.
Among BSE sectoral indices, consumer durables index fell the most by 1.39 per cent, healthcare 0.79 per cent, TECk 0.54 per cent and oil & gas 0.54 per cent. On the other hand, realty index was up 0.8 per cent, capital goods 0.47 per cent, auto 0.1 per cent and infrastructure 0.06 per cent.
Top five Sensex gainers were Tata Motors (+1.51%), State Bank of India (+1.3%), GAIL (+1.24%), M&M (+1.19%) and Cipla (+0.55%), while the major losers were Bharti Airtel (-2.62%), Lupin (-2.08%), Maruti (-2.01%), Sun Pharma (-1.67%), and Axis Bank (-1.6%).
RBI policy review
The Reserve Bank of India is widely expected to keep its benchmark repo interest rate unchanged at a five-year low of 6.50 per cent, a Reuters poll showed last week. Most analysts, however, expected a 25 bps cut later this year, depending on the progress of monsoon rains.
June is expected to be a volatile month, with the Fed due to conclude its two-day meeting on June 16, although expectations of a rate hike next week have receded after a much weaker-than-expected US jobs report.
That could pause gains in markets after indexes on Friday hit their strongest levels since late October on hopes about a recovery in the Indian economy.
“As the Nifty has risen significantly in the last few sessions, investors now keenly wait for signals from market-moving events such as the RBI policy meet, the US Fed decision, India's monsoon data and most importantly, the Brexit referendum later this month,” said Rajesh Agarwal, head of research at AUM Capital Market.
Global markets
European stocks steadied on Monday after falling at the end of last week in the wake of weak US jobs data, as gains in the shares of major mining and oil companies propped up the region's markets.
The pan-European STOXX 600 and FTSEurofirst 300 equity indexes were both flat, having fallen around 1 per cent on Friday.
A report by SMC Global said "Asian markets traded mixed today, with Japan shares taking a tumble, as a disappointing May jobs report in the US on Friday weakened the dollar and bolstered regional currencies, including the yen. US stocks pared earlier losses to close modestly lower Friday as investors weighed implications of a dismal jobs report on the Federal Reserve monetary policy decision in two weeks.US factory orders surged up by 1.9 per cent in April after climbing by an upwardly revised 1.7 per cent in March. The continued increase in orders matched economist estimates. The jump in factory orders reflected a notable increase in durable goods orders, which shot up by 3.4 per cent in April following a 2.0 per cent increase in March."