BSE Sensex fell for a third consecutive session on Tuesday to mark its lowest close in nearly two weeks, as interest-rate sensitive stocks declined after the Reserve Bank of India (RBI) held rates steady, while boosting banks’ liquidity in a bid to persuade them to lower lending rates.
Stocks continued their retreat from record highs hit last week after the Reserve Bank of India kept its policy repo rate unchanged at 7.75 percent, leaving its next reduction probably until after the government presents its annual budget at the end of this month.
Falls also tracked selling by overseas investors worth 6.3 billion rupees on Monday, after 11 continuous days of buying and a total of $2.9 billion of stock buying so far this year, provisional exchange and regulatory data showed.
The benchmark BSE index fell 0.42 percent, while the broader NSE index ended 0.46 percent lower, marking their lowest close since Jan.21.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
RBI event was on expected lines but correction in realty and financials signaled market’s expectation for a rate cut. Further, concerns over bank asset quality have weighed on financials, especially PSU banks. Ahead of the impending budget, Rajan has paved way for creating more liquidity in the system for banks to capitalize on a recovery in the cycle. Further policy actions would be data depended and probably post the budget session. On these lines, though it will be difficult to say how government uses this platform for reforms, market expects the budget to be the key in increasing corporate and household confidence to save, jobs and capex cycle revival. In the meantime, poor data coming from Q3FY15 bank results and fund requirement for divestment will continue to impact the market in the near term. Such correction would be healthy to price-in budget expectations.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
Market opened with a positive note but later in the day we saw heavy selling in rate sensitive sector due technical correction and weak earnings numbers.
Today the central bank came out with its monetary policy where the RBI kept its key interest rates unchanged. To increase liquidity the central bank has reduced SLR by 50 basis points from 22% to 21.5% with effect from the fortnight beginning February 7, 2015 and has also decided to replace export credit refinance facility with the provision of system level liquidity to help the exports sector. The RBI also pointed out to wait for more cues from the coming economic events.
Nifty today closed at 8756, down around 40 points. The market breadth changed to negative from positive as there were seen 1329 stocks advancing against 1537 stocks declining. The Nifty volatility index, India VIX stood at 19.8075 down around 2.92%.
The major gainers in the sectoral front were Oil & gas and FMCG which closed up around 1.99% and 1.06% respectively whereas the major loser were Banking and Realty sector, closed down around 2.61% and 1.43% respectively.
In the stocks’ front, buying were seen in SSLT and Bharti Airtel, closed up around 5.90% and 4.09% whereas selling were seen in PNB and Axis Bank which closed down around 8.32% and 5.13% respectively.
The FIIs were net sellers in the capital market segment, sold shares worth Rs 629.97 crore on Monday, 02 February 2015. On the other hand the DIIs were net sellers on 02 February 2014, sold shares worth Rs 224.07 crore as per the provisional data from the stock exchanges.
The European markets rose on the eased concerns that the Greece would confirm its creditors after it retreated from a plan to ask the euro area to write down its debt. The US index futures were also trading higher.
Century ENKA, Man Infra, JB Chem Pharma, Bharti Airtel, APLLTD, KEC, Tube Investment, Tril, GPPL, Jubliant Inds, Tata Power, BBTC, Bomdyeing, NFL, Central bank and Dolphinf Offshore are some of the major ones which may announce their earnings tomorrow.
Sensex falls to 2-wk low; bank shares slip as RBI holds rates
(PTI) Markets fell for the third straight session with the benchmark Sensex today slipping 122.13 points to end at nearly two-week low of 29,000.14, weighed down by rate-sensitive banking and realty shares after the RBI disappointed markets by not lowering interest rates.
In highly volatile trade, the BSE Sensex opened higher and rallied to 29,253.06 in early deals. However, it entered the negative terrain after the RBI policy was announced and even dipped below the 29,000-mark to touch low of 28,900.41.
However, the bluechip index managed to gain some ground and closed at 29,000.14, down 122.13 points, or 0.42 per cent.
The gauge has now lost 681.63 points in three days and closed at its weakest since 28,888.86 on January 21, 2015.
On similar lines, the 50-share NSE index Nifty finished 40.85 points down, or 0.46 per cent, at 8,756.55 after moving between 8,726.65 and 8,837.30 intra-day.
RBI today left interest rate unchanged at 7.75 per cent, but cut the statutory liquidity ratio (SLR) – the amount of funds that lenders must set aside – by 50 basis points to 21.5 per cent of deposits from February 7.
“Markets showed their disappointment on the outcome of monetary policy,” said Bonanza Portfolio, Associate Fund Manager, Hiren Dhakan.
Among prominent banking stocks, Axis Bank, SBI, HDFC Bank and ICICI Bank fell up to 4.95 per cent.
Sectorwise, the BSE Banking index suffered the most by falling 2.61 per cent largely on the fall in stocks post the RBI policy announcement.
In other sectoral indices, BSE Realty index fell 1.43 per cent, Healthcare index (0.92 per cent), Power index (0.68 per cent) and Auto index (0.66 per cent) among others.
In the 30-share Sensex constituents, 16 ended lower and 14 gained, helping the benchmark indices trim losses.
Meanwhile, oil firms were in better form with Reliance Industries up 3.25 per cent and ONGC up 2.64 per cent after a rebound in international crude prices.
Globally, a rise in European stocks at opening and a mixed trend at the other Asian markets also influenced the trading sentiments here, a broker said.
Meanwhile, Foreign Portfolio Investors sold shares worth a net Rs 629.97 crore yesterday as per provisional data.