Sensex, Nifty trade in red; PSU banks fall post recap announcement

The benchmark indices opened flat with negative bias on Thursday even as Asian markets held near a record high though concerns about the Trump administration’s protectionist stance cast a shadow on financial markets. Sentiment remained cautious as the derivatives contracts of January series will expire later in the day.

At 9:18 am, the S&P BSE Sensex was trading at 36,114, down 48 points, while the broader Nifty50 was ruling at 11,070, down 15 points.

In the broader market, the BSE Midcap was marginally higher, while the BSE Smallcap was little changed. 

"Today being the January series expiry, traders would keep a close watch on the trading range of 11,100-11,000. As far as trading strategy for next few days is concerned, we reiterate that traders should look to take some money off the table ahead of the major event," noted Angel Broking in a research note. 

Banking stocks in focus

Nifty Bank and Nifty PSU Bank indices shed up to 1 per cent after Finance minister Arun Jaitley on Wednesday unveiled details of the recapitalisation plan for public sector banks (PSBs) that was announced in October.

The government will infuse Rs 88,139 crore into 20 public sector banks, of which Rs 80,000 crore will come through recap bonds and the remaining Rs 8,139 crore through budgetary allocation.

Of this, IDBI Bank will get Rs 10,610 crore, Bank of India will receive Rs 9,232 crore, Uco Bank Rs 6,507 crore, Punjab National Bank Rs 5,473 crore, Bank of Baroda Rs 5,375 crore and Central Bank of India 5,158 crore.

Earnings today

Meanwhile, Dr Reddy's, Coal India, Jindal Steel, LIC Housing FInance, Maruti SUzuki, UPL and Tata Coffee, among others, are expected to report their December quarter earnings.

Rollovers on Wednesday

The market-wide rollovers came in at 54 per cent on Wednesday, which were lower than the average rollovers for the last three series of 56 per cent. The Nifty rollovers stood at 41 per cent, and were lower than average rollover of 47 per cent seen in the last three F&O series.

Global markets

Among Asian markets, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.15 percent while Japan’s Nikkei fell 0.8 percent, hit by the dollar’s decline against the yen.

On Wall Street, The Dow Jones Industrial Average rose 41.31 points, or 0.16 per cent, to 26,252.12, the S&P 500 lost 1.6 points, or 0.06 per cent, to 2,837.54 and the Nasdaq Composite dropped 45.23 points, or 0.61 percent, to 7,415.06.