Asian stocks are lower today as Japanese and Hong Kong shares show losses. The Nikkei 225 is down 0.3% while the Hang Seng is up 0.4%. The Shanghai Composite is trading down by 0.2%. Meanwhile, the Nasdaq fell for the third straight day as a sell-off in Chinese markets sparked concerns about slowing global economic growth, though the S&P 500 pared losses to end nearly flat.
Back home, India share markets opened in green today. The BSE Sensex is trading up by 160 points while the NSE Nifty is trading up by 51 points. The BSE Mid Cap index opened up by 1.6% while the BSE Small Cap index opened the day up by 1%.
Sectoral indices are trading on a positive note with automobile stocks and oil & gas stocks witnessing maximum buying interest.
The rupee is trading at Rs 74.23 against the US$.
In the news from the macroeconomic space, the Reserve Bank of India (RBI) has announced that it will inject Rs 120 billion liquidity into the financial system through purchase of government bonds on October 11. This is done to meet the festival season demand for funds.
The auction to purchase the above bonds is a part of the Open Market Operations (OMO) by the central bank to manage liquidity into the system which seems to be facing liquidity tightness.
OMOs are tools which can be used to either inject or drain liquidity from the financial system.
It is employed to adjust rupee liquidity conditions in the market on a durable basis. If there is excess liquidity, the RBI resorts to sale of securities and takes out the rupee liquidity. When the liquidity conditions are tight, it buys securities from the market, thereby releasing money into the market.
In other news, as per a leading financial daily, the Serious Fraud Investigation Office (SFIO) has zeroed in on five group firms of Infrastructure Leasing & Financial Services (IL&FS) for fund diversion and mismanagement.
