Rate-sensitive stocks drag equity indices lower (Roundup)
Mumbai Dec 6 (IANS) Key Indian equity indices on Wednesday declined to close on a lower note dragged lower by interest-rate sensitive stocks after the Reserve Bank of India (RBI) maintained status quo on its key lending rates in the fifth monetary policy review of 2017-18.
Rate-sensitive stocks like banking metals and capital goods closed trade deep in the red with the Nifty Bank index down 1.09 per cent and banking stocks plunging almost 2 per cent.
According to market observers along with the RBI s review global markets as well as foreign fund outflows added to the downfall of the indices.
On a closing basis the wider Nifty50 of the National Stock Exchange (NSE) fell by 74.15 points or 0.73 per cent to 10 044.10 points.
The barometer 30-scrip Sensitive Index (Sensex) of the BSE closed at 32 597.18 points -- down 205.26 points or 0.63 per cent -- from its previous close.
The BSE market breadth was bearish -- 1 680 declines and 964 advances.
In the broader markets the S&P BSE mid-cap index closed lower by 0.89 per cent and the small-cap index by 0.66 per cent.
"Markets ended sharply lower on Wednesday as selling was seen pre-noon and post the RBI MPC (Monetary Policy Committee) announcement. The key indices tumbled after the RBI kept key policy rates unchanged on the back of the monetary policy review today " Deepak Jasani Head Retail Research HDFC Securities told IANS.
"Negative global cues too weighed on the market sentiments " Jasani added.
Data released during market hours revealed that the RBI maintained status quo on key lending rates citing concerns over the rising trajectory of inflation. It retained the economic growth projection for the current fiscal.
The central bank said its repurchase rate or the short-term lending rate for commercial banks had been maintained at 6 per cent. Consequently the reverse repo rate remained at 5.75 per cent.
Vinod Nair Head of Research Geojit Financial Services said: "After the inline RBI policy indian market shifted its focus towards the global market which was under negative trend.
"But given that interest rates are unlikely to reduce at least in the near to medium term rate sensitive stocks slid due to rising oil price and concern over fiscal slippage."
Sector-wise the S&P BSE banking index plunged by 348.72 points metal index by 276.87 points and capital goods index by 198.93 points.
On the other hand the S&P BSE IT index was up by 34.72 points energy index by 19.01 points and Teck (technology media and entertainment) index by 1.80 points.
On the currency front the rupee weakened by 13-14 paise at 64.52 against the US dollar from its previous close at 64.38-39.
Provisional data with the exchanges showed that foreign institutional investors sold scrips worth Rs 1 217.92 crore while domestic institutional investors bought stocks worth Rs 995.11 crore.
Major Sensex gainers on Wednesday were: Reliance Industries up 1.76 per cent at Rs 927.50; Maruti Suzuki up 1.23 per cent at Rs 8 600.65; Hindustan Unilever up 1.05 per cent at Rs 1 273.85; Infosys up 0.61 per cent at Rs 990.40; and Power Grid up 0.07 per cent at Rs 200.30.
Major Sensex losers were: Sun Pharma down 2.31 per cent at Rs 511.55; State Bank of India down 2.21 per cent at Rs 312.25; ICICI Bank down 1.96 per cent at Rs 299.40; HDFC down 1.78 per cent at Rs 1 648.95; and Bajaj Auto down 1.65 per cent at Rs 3 108.60.