Nifty ends above 7500; TCS up 2%, banks & infra drag

16 Jun 2014

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03:45 pm Moody's report on RBI
The Reserve Bank of India's recent guidelines on liquidity risk management is credit positive for banks, says a report.

The central bank last week issued the final Basel III framework on liquidity standards, which included guidelines on the minimum liquidity coverage ratio (LCR), liquidity risk monitoring tools and LCR disclosure standards.

The RBI said the liquidity coverage ratio (LCR) will be introduced in a phased manner with a requirement of 60 percent from January 2015. The requirement would rise in equal steps to reach the minimum required level of 100 percent on January 1, 2019, it added.

"These guidelines are credit positive for Indian banks," global rating agency Moody's said in a report.

03:35 pm Market closing
Not much of action seen on Dalal Street with a bit of profit booking. The Sensex was down 37.69 points at 25190.48 and the Nifty was down 8.55 points at 7533.55. About 1385 shares have advanced, 1564 shares declined, and 116 shares are unchanged.

GAIL, TCS, Sun Pharma, Infosys and BHEL were top gainers in the Sensex. Among the losers were Axis Bank, M&M, L&T, HDFC and Tata Motors.

03:20 pm Opinion on realty stocks
Gopi Suvanam, Founder, InvestWorks expects to see big amount of sell off in realty stocks. ''Realty is one sector that could see a big amount of sell off. Fundamentally two reasons, one is high beta so any sell off in Nifty will be reflected in Real Estate. Secondly, the price earning (PE) ratios are the highest for real estate at the moment. For example, DLF is trading above 60 PE ratio, Unitech is also trading at very high numbers but I am more inclined to selling DLF. Primarily because if there is a significant ETF outflow in Nifty that will be more reflected in DLF than in Unitech so I would want to short DLF at this moment with a target of around Rs 190,'' he said in an interview to CNBC-TV18.

03:10 Stake hike
State-owned ONGC may raise its stake in Cairn India's prolific Rajasthan oil fields as a condition for agreeing to allow the Anil Agarwal-group firm operate the block after expiry of contractual period.

Cairn's contractual term for exploring and producing oil from the Rajasthan Block RJ-ON-90/2 expires in 2020 and the area is to return to the block licensee, Oil and Natural Gas
Corp (ONGC).

ONGC, which currently holds 30 percent stake in the block, has told the Oil Ministry that the Production Sharing Contract (PSC) can be extended beyond 2020 if all parties to
the contract agree on mutually agreeable terms.

"We are internally discussing Cairn's request for extending the PSC by at least 10 years. As a licensee, we have our concerns on royalty which would be like to be addressed at
the time of extension," a top ONGC official said.

02:58pm Rate hike unlikely?
Inflation rates haven't petered down enough for the central bank Reserve Bank of India to cut rates, but it is unlikely to hike them either, says Renu Karnad, managing director, HDFC.

Speaking to CNBC-TV18, Karnad says the main concern right now is the El Nino effect that may lead to a rainfall deficit.

''If this were to happen, then there would be no question of food prices coming down,'' she adds.

02:50pm United Spirits up 0.5%
Edelweiss Group companies bought 2.57 percent equity stake in United Spirits by revoking pledged shares.

Edelweiss Group holds 4.33 percent in USL as pledged shares. Total holding of the group in USL stands at 6.90 percent.

02:45pm Market Update
The market rebounded in last hour of trade. The Sensex rose 15.29 points to 25243.46 and the Nifty advanced 4 points to 7546.10. The BSE Midcap and Smallcap gained too, up 0.4 percent and 0.1 percent, respectively. About 1206 shares have advanced, 1639 shares declined, and 105 shares are unchanged.

GAIL rallied nearly 4 percent after brokerage house Nomura maintains buy rating on the stock and raised target price to Rs 525 from Rs 450 earlier.

"We maintain our positive stance on the shares, even with the unexpectedly weak Q4. Our conviction remains high on key segments (excluding petchem)," says the brokerage house in its note.

02:35pm WPI inflation reaction
WPI inflation in May touched its highest level since December 2013 at 6.01 percent versus 5.3 percent in the previous month; negating positive trend depcited by consumer prices . This surge is courtesy higher food, fuel and and manufactured product prices. Core inflation in May jumped by 40 basis points to 3.8 percent.

Rupa Rege Nitsure, Chief Economist, Bank of Baroda believes election-led spending may have hit consumer durables and consumer non-durable sales, hence pressuring prices.

Both CPI and WPI food inflation has surged above 9 percent even before the impact of sub-par monsoon or El-Nino has been felt, so the government should put in place contingency plans as far as monsoon is concerned, Aditi Nayar, Economist, ICRA said.

02:30pm Interview
Towards the latter half of the current financial year that is beginning between October and March, there is a strong opportunity for at least about Rs 15,000-20,000 crore of bids coming out in the road sector, says K Venkatesh, CEO & MD of L&T Infrastructure Development Project.

He says in the latter half of current year once the numbers are updated and the RFQ process etc has restarted that is the opportunity that presents itself to all developers in the sector.

The company is planning to raise capital by evaluating partnerships at the holding company level and is also planning to list in Singapore. L&T may have to derisk itself.

02:20pm Mahindra & Mahindra in news
The realty arm of the Mahindra Group, Mahindra Lifespaces, has launched a new business vertical focused on affordable housing called 'Happinest'.

The vertical has launched its first two projects at Avadi in Chennai and Boisar in Mumbai. Anand Mahindra, CMD, M&M Group thinks the two pilot projects are not just for Mahindra but for the country.

''If these two (projects) succeed and if we are able to get our clearances in time and execute the construction on time then they will be profitable. If they are profitable then you can be sure that many other developers will flood into this market,'' he says.

02:10pm Market Expert
Although the market is consolidating for the last few days, investors are hoping a pre-Budget rally with pull the mood up. But Dipan Mehta, member BSE, NSE is extremely cautious and warns against pinning much hope on a Pre-Budget rally. Instead he advises investors to wait and watch out how things pan out after next week.

Mehta is visibly worried about the Iraq crisis which can spike up oil prices further. "Volatile oil prices may result in flight of capital. So short-term buy calls will depend on how oil market reacts to the situation next week," Mehta told CNBC-TV18.

The other worry is the advent of a weak monsoon which will have a direct impact on inflation, which in turn will hurt corporate profits and may result in wider deficit. Rate cuts won't be possible for some time now. "So it is double whammy, weak monsoons and global oil prices," he said.

02:00pm Equity benchmarks cut losses in afternoon trade with the Nifty holding 7500 level supported by technology and FMCG stocks. However, banks and capital goods remained under pressure.

The Sensex fell 53.54 points to 25174.63 and the Nifty declined 16 points to 7526.10. About 1081 shares have advanced, 1755 shares declined, and 98 shares are unchanged.

Shares of Larsen & Toubro, Reliance Industries, HDFC, ICICI Bank, Axis Bank, M&M, Tata Motors, State Bank of India and Maruti Suzuki lost 1-3 percent.

However, Infosys, TCS, Sun Pharma and GAIL bucked the trend, up 2-3 percent followed by Tata Power, Bajaj Auto and Wipro with 1-1.7 percent.

2:00 pm Buzzing: Shares of Cairn India climbed 3 percent intraday. Media report suggested that state-owned ONGC may raise its stake in company's prolific Rajasthan oil fields as a condition for agreeing to allow the Anil Agarwal-group firm operate the block after expiry of contractual period. ONGC gained more than a percent intraday.

Cairn's contractual term for exploring and producing oil from the Rajasthan Block RJ-ON-90/2 expires in 2020 and the area is to return to the block licensee, Oil and Natural Gas Corp (ONGC).

ONGC, which currently holds 30 percent stake in the block, has told the oil ministry that the production sharing contract (PSC) can be extended beyond 2020 if all parties to the contract agree on mutually agreeable terms.

1:50 pm interview:  Towards the latter half of the current financial year, there is a strong opportunity for at least about Rs 15,000-20,000 crore of bids coming out in the road sector, says K Venkatesh, CEO & MD of L&T Infrastructure Development Project Ltd.

He says in the latter half of current year once the numbers are updated and the RFQ process etc has restarted that is the opportunity that presents itself to all developers in the sector.

The company is planning to raise capital by evaluating partnerships at the holding company level and is also planning to list in Singapore. L&T may have to derisk itself.

1:40 pm Pre-Budget hopes: Dipan Mehta, member BSE, NSE is extremely cautious and warns against pinning much hope on a Pre-Budget rally. Instead he advises investors to wait and watch out how things pan out after next week.

Mehta is visibly worried about the Iraq crisis which can spike up oil prices further. "Volatile oil prices may result in flight of capital. So short-term buy calls will depend on how oil market reacts to the situation next week," Mehta told CNBC-TV18. The other worry is the advent of a weak monsoon which will have a direct impact on inflation, which in turn will hurt corporate profits and may result in wider deficit. Rate cuts won't be possible for some time now. "So it is double whammy, weak monsoons and global oil prices," he said.

1:30 pm Buzzing: Shares of Granules India rallied as much as 4.1 percent after the pharmaceutical company announced its Paracetamol (to treat fever) facility successfully passed a US Food and Drug Administration (FDA) inspection without any 483 observations.

"The facility has the world's largest single API production line by volume," says the company in its filing.

Granules's four facilities have successfully passed US FDA inspections in the past 12 months. All of Granules' facilities including its finished dosage and PFI facility are approved by leading regulatory agencies including USFDA, European Directorate for the Quality of Medicines & HealthCare (EDQM), Health Canada and Korean FDA.

The market is still under selling pressure as the WPI inflation increased to 6.01 percent The Sensex is down 138.57 points at 25089.60 and the Nifty is down 43.00 points at 7499.10. About 934 shares have advanced, 1772 shares declined and 93 shares are unchanged.
 
Capital goods and financial stocks weigh. Wholesale prices for May shoot up 6 percent from 5.3 percent in April. Negating positive trend depicted by consumer prices. WPI pushed up by higher food and manufactured product prices.

Rupee tumbled to lowest level in five weeks as wholes sale inflation shocks.

IT stocks continue to outperform, TCS gains after the management in the analyst conference call reiterated that FY15 will be better than FY14. UBS says most investors believe that even a 5 percent sequential growth would be tough in Q1 given the large revenue base.

Asian markets trade mostly lower.

12:59pm Media report suggests that ONGC will hike stake in Cairn's Rajasthan oil block. ONGC currently holds 30 percent stake in Cairn's Rajasthan block. Cairn India rallied 1.5 percent and ONGC rose 0.6 percent.

12:55pm Gujarat Flurochemicals subsidiary bags order
Inox Wind, a subsidiary of Gujarat Flurochemicals has received a 170 mega watt order from Continuum Wind Energy. The project is to be constructed in and around Ratlam and Mandsaur districts of Madhya Pradesh and it is one of the largest wind turbine orders in India for a single project.

Director, Devansh Jain says, "This is amongst the largest orders a wind manufacturer been awarded in India. The size of this order book is in excess of Rs 900 crore and we expect to execute over the next four quarters."

12:50pm GAIL up 2.75%
Nomura maintains buy rating on GAIL and raised target price to Rs 525 from Rs 450 earlier. "We maintain our positive stance on the shares, even with the unexpectedly weak Q4. Our conviction remains high on key segments (excluding petchem)," says the brokerage house in its note.

12:45pm Rupee falls further
The Indian rupee declined 60.18 a dollar in afternoon trade, the lowest level since May 9, down 42 paise compared to Friday's close after inflation in May touched 5-month high.

WPI inflation touched its highest level since December 2013 at 6.01 percent in May versus 5.2 percent in the previous month, driven by higher food and fuel prices. Core inflation in May jumped by 40 basis points to 3.8 percent versus 3.4 percent in April.

12:40pm Titagarh Wagons bags order
Titagarh Wagons has made its maiden foray into the large potential of Metro rail coach business. "Recently it bagged a contract for rehabilitation of 56 coaches (7 rakes) from the Kolkata Metro Railway. The scope of the job would involve midlife special repair and rehabilitation of the rakes," the company says in its filing.

Umesh Chowdhary, vice chairman & managing director says, "It is a very important milestone for the group. While our ultimate objective is to find a suitable technology partner and add to the present portfolio of products and undertake manufacturing of metro coaches and other modern passenger coaches, this order provides us with a stepping stone into this segment of business."

12:35pm Gainers and Losers
Engineering & construction major L&T and private sector lender Axis Bank dropped 2.5 percent each followed by Reliance Industries, ICICI Bank, Tata Motors, HDFC, M&M, State Bank of India, Tata Steel, Coal India and NTPC with 1-2 percent.

However, Infosys, TCS and GAIL topped the buying list, gaining 2 percent each. Sun Pharma, Bajaj Auto and Hero Motocorp rose 1 percent each.

12:25pm FII View
Joanne Goh, DBS says the brokerage house believes positive sentiment post the NDA win has been largely been priced in.

''The next wave up will have to be supported by growth, and the market could see some resistance when PE valuations reach +1SD; this still translates to a further 15 percent upside from current levels. Unless we observe more significant growth upgrades from here, we are maintaining our Neutral stance on the market,'' he said.

12:15pm Interview
Coal prices are likely to remain at current levels over the next two years, which is beneficial for Mundra plants, says Anil Sardana, MD, Tata Power. He adds that cost of power at Trombay also remains competitive. The company has outperformed its peers in the bourses.

Sardana says its not just coal prices that impact margins, it's also the exchange rate variation. If the exchange rate is favourable, Mundra too gets an advantage.

On compensatory tariff case with Appellate Tribunal for Electricity (APTEL), he says the tribunal has reserved order on the request of procurers with regard to stay. The order is expected in a week. The company is billing procurers as per the CERC order.

12:10pm Market Expert
The market is unlikely to correct sharply, but stocks with a low return on capital (RoC) and those with a high beta are likely to struggle, says Saurabh Mukherjea of Ambit Capital. In an interview to CNBC-TV18, Mukherjea said 23,000 is a strong base for the Sensex in this market.

Ambit's year end target for the Sensex is 30,000.

According to Mukherjea, the government is making good progress on coal and power reforms. Also, he sees the government gradually resolving the oil subsidy issue. Mukherjea is recommending his clients to buy Coal India and ONGC, even though both stocks have had a fairly good run over the last few months.

12:00pm The market remained under selling pressure as the WPI inflation increased to 6.01 percent in May (the highest level since December 2013) as against 5.2 percent in April and expectations of 5.3 percent.

Core inflation in May jumped by 40 basis points to 3.8 percent compared to last month while March WPI inflation was revised to 6 percent from 5.7 percent earlier.

The Sensex fell 111.59 points to 25116.58 and the Nifty lost 37.35 points to 7504.75. About 961 shares have advanced, 1620 shares declined, and 93 shares are unchanged.

The rupee slipped 28 paise to 60.04 a dollar in afternoon trade.

12:00 pm Tata's plans: Various firms of Tata group have lined up capital expenditure worth over Rs 65,000 crore for the current fiscal.

The capex is part of respective medium-term strategies of the different companies covering all the business sectors of the group, ranging from engineering, materials, information technology and communications, consumer products, services, energy to chemicals.

The majority of the investments will be by the group's top companies, Tata Steel, Tata Motors and Tata Consultancy Services (TCS).

While Tata Steel would have a capex of nearly Rs 16,500 crore in FY15, Tata Motors has earmarked around Rs 38,500 crore, of which Rs 35,000 crore will be for its British arm JLR and Rs 3,500 crore for its operations in India.

11:50 am Modi's pre-Budget tough talks Prime Minister Narendra Modi warned of "tough decisions" over the next couple of years to improve the country's financial health, which he said may not go down well with some sections and attacked the way the UPA government had handled the economy.

"Taking tough decisions and strong measures in the coming one or two years are needed to bring financial discipline which will restore and boost the country's self-confidence", he said while addressing BJP workers in Panaji.

This is the first occasion in less than three weeks since taking over reins of power that Modi has made sharply critical comments on the Manmohan Singh government's performance.

11:40 am Steel output: The steel ministry has raised concerns over the drastic fall cut in iron ore production from 209 metric tonne (MT) in FY11 to 145 MT in FY14.

Quoting judicial intervention as the reason for the fall in production, the steel ministry has also said that there is a lot of discrimination in the allocation of coal mines to steel sector.

The ministry has said that inordinate delays of mining leases by state and central government is hurting the sector. It further adds that the cap on iron ore mining is jeopardizing raw material security for steel plants and has requested the government to bring steel products under negative list to protect domestic industry.

11:30 am Buzzing: Shares of telecom operator Idea Cellular gained as much as 2.5 percent intraday after foreign institutional investors (FIIs) can buy up to 49 percent stake in company.

"The Reserve Bank of India on Friday notified that FIIs, through primary market and stock exchanges, can now purchase up to 49 percent of the paid up capital of Idea Cellular under the portfolio investment scheme (PIS)," says the central bank.

The telecom operator had passed this resolutions at the board of directors' level on November 29, 2013 and a special resolution by the shareholders on December 26, agreeing for enhancing the limit from 24 percent to 49 percent for the purchase of its equity shares and convertible debentures by Foreign Institutional Investors (FIIs).

11:20 am Market outlook: The market is unlikely to correct sharply, but stocks with a low Return on Capital (RoC) and those with a high beta are likely to struggle, says Saurabh Mukherjea of Ambit Capital. In an interview to CNBC-TV18' Mukherjea said 23,000 is a strong base for the Sensex in this market. Ambit's year end target for the Sensex is 30,000.

According to Mukherjea, the government is making good progress on coal and power reforms. Also, he sees the government gradually resolving the oil subsidy issue. Mukherjea is recommending his clients to buy Coal India and ONGC, even though both stocks have had a fairly good run over the last few months.

The market is still struggling as developments in Iraq and the upcoming Federal Open Market Committee (FOMC) make traders cautious. The Sensex is down 75.05 points at 25153.12 and the Nifty is down 31.45 points at 7510.65.

L&T, M&M, Tata Power, Axis Bank and Reliance are losers while GAIL, Infosys, Sun Pharma, TCS and Bajaj Auto are top gainers in the Sensex.

About 898 shares have advanced, 1563 shares declined, and 80 shares are unchanged.

The rupee is at one-month low as Iraq tensions weigh on risk appetite. Bonds have hardened on fears of crude prices rising.

Most Asian currencies such as the Thai baht, Indonesian rupiah are weak against the dollar as escalating geopolitical tensions in Iraq dent sentiment. The euro is weaker while the yen is stronger on the back of safe haven buying.

Oil is the big commodity in focus retreating from the highs seen on Friday. Last week oil futures posted their largest weekly gain since December as Sunni insurgency in Iraq jolted the market. Gold prices are above USD 1280 per ounce. Asian markets trade mostly lower while Japanese markets trade in the red reacting to stronger yen.

10:55am Granules in News
Granules India announced its Paracetamol facility successfully passed a US FDA inspection without any 483 observations. The facility has the world's largest single API production line by volume.

Granules's four facilities have successfully passed US FDA inspections in the past 12 months. All of Granules' facilities including its finished dosage and PFI facility are approved by leading regulatory agencies including USFDA, EDQM, Health Canada and Korean FDA.

10:45am Market Update
Equity benchmarks recouped half of losses. The Sensex declined 66.51 points to 25161.66 and the Nifty fell 26.40 points to 7515.70. About 730 shares have advanced, 1577 shares declined, and 68 shares are unchanged.

10:40am TCS gains 2% post concall
India's largest software services exporter Tata Consultancy Services said Europe continues to "drive" growth for the USD 13.4 billion company helped by demand across verticals and service lines. Also smaller verticals like Media & Entertainment and Travel & transportation are growing better than the firm's overall average growth, the Mumbai-headquartered company said in a business update for the first quarter of 2014-15 fiscal.

Though, TCS does not give revenue guidance, it added that there is no change in the revenue outlook for Q1 2014-15. "There is no change in revenue outlook (for Q1 FY 2015) compared to our last quarter's earning. Europe continues to grow faster and India is likely to be flattish or in that range," TCS CFO Rajesh Gopinathan said in a concall.

10:30am Interview
After having invested over Rs 2,300 crore and reaching a break-even level at its Chennai facility, Apollo Tyres is looking at expanding its Chennai Facility.

Satish Sharma, president – APMENA, Apollo Tyres said, "Chennai has become a success story. When we commenced operrations here in 2010,  we started producing about 5,200 tyres a day against an installed capacity of 6,000. The company has space to add 30 percent capacity at the unit. We will expand our Chennai facility. We though the break-even period will be seven years but we reached it in 3 years."

The company is also focusing on its Kerala facility. "We will invest over Rs 400 crore in our Kerala facility. With this expansion,  we will increase our production capacity from 30 tonnes a day to 110 tonnes a day within the next one and a half years," Satish Sharma added.

10:20am Gainers and Losers
Tata Power, Larsen & Toubro, Tata Steel, NTPC, Coal India, Punjab National Bank, UltraTech Cement and Bank of Baroda topped the selling list, falling 2-3 percent.

However, TCS, Infosys, Sun Pharma, Bajaj Auto and ITC bucked the trend, rising 1-2 percent.

In the midcap space, DB Realty rallied 15.6 percent followed by ESS DEE Aluminium, Edelweiss Financial, Britannia and Strides Arcolab with 3-6 percent while Cholamandalam, Sintex Industries, Hindustan National Glass, Jaypee Infra and State Bank of Travancore slipped 5-7 percent.

10:10am FII View
Rakesh Arora, Macquarie says midcaps & smallcaps are still trading below/at average discounts to the previous bull cycles and may continue their outperformance, despite having outperformed large caps by 13 percent and 34 percent year-to-date.

''Deleveraging/equity raising will be a dominant theme and markets tend to rally in the run-up to issuance activity. Last few cycles saw equity raising of USD 30-40 billion before markets peaked. From our coverage, our high-conviction midcap buys are CESC, Eicher Motors, Glenmark Pharma, IRB Infrastructure, Sobha Developers, Strides Arcolab and YES Bank.

10:00am Equity benchmarks remained under selling pressure with the Nifty falling below 7500 level on account of Iraq crisis. The index declined 48.85 points to 7493.25 while the Sensex fell 136.13 points to 25092.04.

The BSE Midcap and Smallcap indices cracked further, down 1.8 percent each. Declining shares outnumbered advancing ones by a ratio of 1448 to 540 on the BSE.

The rupee touched 60 a dollar for the first time since May 12, 2014. Paul Mackel, MD & Head of Asian Currency Research at HSBC cautioned that the Indian rupee may weaken further if the current turmoil in Iraq worsens.

Sharing his long-term outlook on the currency, he told CNBC-TV18 that he is positive on the rupee and he foresees the rupee ending the year at 60/USD. Those looking to play the currency, can consider Rs 60/USD as an attractive level to go short it, he recommended.

10:00 am Stake slash
State-run gas utility GAIL India will cut its equity stake in ONGC's mega petrochem project at Dahej to 11.6 percent as project faces major cost overrun. GAIL had in 2008-09 picked up 19 percent stake in ONGC Petro-additions , which is building a mega petrochemical complex at Dahej in Gujarat.

The 1.1 million tonnes plant was at that time estimated to cost Rs 12,440 crore. But since then the project cost has been revised thrice upwards - first to 15,870 crore in end 2008, then to Rs 19,535 crore in June 2010 and now to Rs 21,396 crore.

9:50 am Buzzing: Shares of telecom operator Idea Cellular gained as much as 2.5 percent intraday after foreign institutional investors (FIIs) can buy up to 49 percent stake in company.

"The Reserve Bank of India on Friday notified that FIIs, through primary market and stock exchanges, can now purchase up to 49 percent of the paid up capital of Idea Cellular under the portfolio investment scheme (PIS)," says the central bank.

The telecom operator had passed this resolutions at the board of directors' level on November 29, 2013 and a special resolution by the shareholders on December 26, agreeing for enhancing the limit from 24 percent to 49 percent for the purchase of its equity shares and convertible debentures by Foreign Institutional Investors (FIIs).

 9:40 am Iraq crisis hit on oil: Iraq currently produces 3.6 million brent crude oil barrels per day and the international markets are worried about the threat that the current rebel movement poses to oil production, says Vandana Hari, Asia Editorial Director, Platts.

Speaking to CNBC-TV18, Hari says Iraq has the potential and has promised to deliver 8 million oil barrels per day and if the rebels attack the oil infrastructure, then it could take the country years to get back to this potential of 8 million barrels per day .

The key issue now, however, is the country's exports and whether they get affected or not. ''South of Iraq produces 2.6 million barrels per day of oil and if the rebels attack this infrastructure, then the country would be badly hit by the crisis,'' adds Hari

9:30 am PSB stable rating: A strong government at the Centre and stability in macro economic factors are likely to keep rating outlook of the country's public sector banks stable for some time, says a report by rating agency Fitch. The macroeconomic and political risks have abated in the country since the election of a new government with a decisive mandate, the report said.

"That may have contained further downside risks, while it will take time to achieve a full recovery for the economy and the banks; therefore, rating outlooks (for state-run banks) are likely to remain stable for now," it said. The appointment of Narendra Modi-led BJP government has improved investors sentiments and the key benchmark indices surged to record levels.

The market has opened on a lower note. The Sensex is down 36.32 points at 25191.85, and the Nifty slips 17.20 points at 7524.90. About 432 shares have advanced, 527 shares declined, and 41 shares are unchanged.

TCS, NTPC, Wipro, Infosys are major gainers in the Sensex. L&T, Coal India, Sesa Sterlite, Axis Bank and Tata Steel are laggards.

The rupee opened lower by 6 paise at 59.82 per dollar as against Friday's close of 59.76 a dollar. The rupee is trading at lowest level since May 13, 2014.

The dollar was slightly higher against the yen as markets listened to the Bank Of Japan's latest comments on policy on Friday while sterling soared on the back of a surprise hint from the Bank Of England that interest rates could rise this year.

Agam Gupta of Standard Chartered said, "The worries from the Iraq crisis and its impact on crude, could weigh on India again."

"Demand from oil companies and some short covering will see demand emerge around 59.60/dollar, while exporters expected to start selling above 60/dollar levels. Expect Rupee to trade in the range of 59.60-60.10/dollar today," he added.

Global markets, meanwhile, are mixed with Asian equities starting the week lower with escalating violence in Iraq weighing on sentiment. US markets moved cautiously higher while Europe ended lower with investors tracking the developments in Iraq closely.
Commodities hogged all limelight with crude receding to USD 113 per barrel after making a fresh 2014 high of close to USD 115.

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