The key benchmark indices traded with a negative bias on Thursday after the Reserve Bank of India (RBI) directed banks to maintain incremental cash reserve ratio (ICRR) at 10 per cent, August 12 onwards, in order to reduce liquidity from the system.
Besides, it increased FY24 inflation forecast to 5.4 per cent from 5.1 per cent, discounting near-term risks. Meanwhile, the Monetry Policy Committee kept the policy repo rate unchanged at 6.5 per cent, extending its pause into third straight policy.
The S&P BSE Sensex tumbled to a low of 65,509 amid selling pressure in private bank and select auto stocks. The index, however, recouped some losses and ended 308 points lower at 65,688.
The NSE Nifty 50 touched a low of 19,495, and finally settled with a loss of 89 points at 19,543.
Among the Sensex 30 shares, Asian Paints shed 3 per cent. Kotak Bank, ITC, Bharti Airtel, Axis Bank, ICICI Bank and Nestle were the other prominent losers. On the other hand, IndusInd Bank gained 1.5 per cent. JSW Steel, Titan and Bajaj Finance also finished with notable gains.
In the broader market, the BSE MidCap and SmallCap indices finished with modest losses of up to 0.2 per cent. The overall breadth was marginally negative, with over 1,900 shares declining as against 1,686 advancing stocks on the BSE.
Sectorally, the BSE Bankex and FMCG indices slipped nearly a per cent each.
Shares of Zee Entertainment hit the 20 per cent upper circuit at Rs 290.50 on the BSE after the NCLT approved Zee-Sony India merger. Analysts expect the stock to get re-rated.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “The MPC has delivered in line with market expectations on rates, stance and tone, with retention of rates and stance and the tone turning hawkish. The significant change is the upward revision in FY24 CPI inflation projection from 5.1% to 5.4%. This means the high policy rates will remain high for long and, therefore, a rate cut can be expected only in Q1 FY25. From the market perspective, there are no positive or negative surprises in the policy.”
Global Cues
Asian stocks lost ground on Thursday, still hurting from China’s slip into deflation, with investors particularly cautious ahead of a crucial U.S. inflation report that will likely influence the Federal Reserve’s monetary policy path.
Tokyo stocks opened lower Thursday following further falls on Wall Street on the back of weak Chinese data and ahead of a key US inflation report.The benchmark Nikkei 225 index was down 0.33 percent, or 106.39 points, at 32,097.94 in early trade, while the broader Topix index trimmed 0.16 percent, or 3.63 points, to 2,278.94.
US stocks closed lower on Wednesday, the day after a report showed Americans borrowed more than ever on their credit cards in the last quarter, and a day ahead of U.S. Consumer Price Index (CPI) inflation data that could influence Federal Reserve interest rate decisions.
Comments
0 comment