Indian benchmark indices closed in the red after digesting RBI’s policy rate action and growth outlook cut yesterday and ahead of the UK elections, the European Central Bank’s policy meeting and ex-FBI Director James Comey’s congressional testimony.
The RBI kept the repo rate unchanged at 6.25 percent and cut SLR by 50 basis points to 20 percent. The monetary policy committee also cut its forecast for headline inflation to between 2.0 and 3.5 percent in the first half of the current fiscal year and between 3.5 and 4.5 percent in the second half, while the forecast for GDP growth for the current fiscal was lower to 7.3 percent and a caution was about inflationary spillovers from the rush to provide farm loan waivers.
The 30-share BSE Sensex opened higher at 31,316.91 points and lost 57.92 points or 0.19 per cent to close at 31,213.36 points, while the 50-share NSE Nifty opened higher at 9,682.40 points and slipped 16.65 points or 0.17 percent, to close at 9,647.25 points. BSE Mid-cap Index closed up 33.75 points or 0.23% at 14834.42 points while, BSE Small-cap Index closed up 46.69 points 0.30% at 15472.55 points.
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“With RBI decision past, markets looked to have retracted into a shell, awaiting further sparks. While UK election and ECB meet added to the restraint, pharma space saw buying after the recent falls attracted bargain buyers. Investors will now look forward to emerging confidence among industry participants as GST rollout approaches,” Anand James, Chief Market Strategist, Geojit Financial Services Ltd said.
“Markets will take cues from the global developments in the coming session. Volatility will remain high, as indices are trading at record high and hence, traders should remain cautious and selective in stock picking,” Jayant Manglik, President, Retail Distribution, Religare Securities said.
Globally, most of the European and Asian markets were trading higher. Hong Kong’s benchmark Hang Seng Index climbed to another 23-month closing high on Thursday, as China’s solid May trade data somewhat offset investor caution ahead of a slew of the three key events, Reuters reported. The Hang Seng index rose 0.3 percent, to 26,063.06, while the China Enterprises Index gained 0.4 percent, to 10,649.90 points, the report added.