Markets end lower as RBI maintains status-quo on key rates

Hindalco, Bharti Airtel and L&T were top gainers while GAIL, M&M and Infosys were the biggest losers

Markets ended lower weighed down by IT majors while rate sensitive shares witnessed profit taking after the Reserve Bank of India decided to keep key rates unchanged at its policy review today.
 
The 30-share Sensex closed down 115 points at 28,444 and the 50-share Nifty ended down 31 points at 8,524. .
 
In the broader market, both BSE midcap and smallcap indices with gains of 0.9% and 0.5% each outperformed their larger peers.  Market breadth in BSE ended marginally positive with 1,513 advances against 1,412 declines.
 

The Reserve Bank of India kept interest rates unchanged at 8% on Tuesday as widely expected, staying focused on containing inflation while adopting a more dovish tone in response to the government's call for help to revive economic growth. However, the central bank indicated rates could ease early next year as inflation shows signs of cooling.

 
Commenting on the RBI’s policy review, Deven Choksey, managing director and chief executive officer, K R Choksey Shares and Securities, said, “RBI has ensured enough liquidity for the markets through equity measures. So, banks should be able to cut their interest rates by at least 25 basis points. RBI as a regulator is allowing banks to take all possible measures to reduce the NPA levels which is definitely a step in the right direction.”
 
Meanwhile, foreign institutional investors were net sellers in Indian equities worth Rs 12.36  crore on Monay, as per provisional stock exchange data.
 
Buzzing Stocks

 
BSE Metal and Healthcare indices, gaining around 1% each were the top gainers among sectors followed by BSE FMCG and Capital Goods indices with 0.6% and 0.7% of gains each.
 
BSE IT index down around 1.5% and BSE Auto index, down more than 1% lost the most. 
 
A rebound in global commodity prices boosted metal stocks. Sesa Sterlite and Hindalco ended with gains of 1.1% and 2.8% each. Tata Steel gained around 0.5%.
 
L&T gained more than 1% and was among the top gainers.
 
ICICI Bank recovered from early lows and ended up 0.7%. The stock turns ex-stock split on Thursday, December 4. Shareholders would be entitled to receive 5 equity shares of nominal value of Rs. 2 each in lieu of 1 equity share of nominal value of Rs. 10 each of the Bank. Axis Bank closed 0.4% high.

 
 Pharma shares closed mixed. Sun Pharma gained around 0.7%. The Competition Commission of India (CCI) is expected to come out with its decision on the merger of Sun Pharma and Ranbaxy this week.  
 
Bharti Airtel, up 1.8% and ITC, up 0.4% were other major gainers.

Among oil and gas shares, GAIL and ONGC lost 2.8% and 0.6% each while RIL ended marginally high by 0.1%.
 
Information technology stocks declined tracking losses in their peers on NASDAQ. Infosys lost more than 2%. The stock turned ex-bonus today. TCS and Wipro lost 1.4% and 0.8% each.
 
Finance major HDFC lost around 1.5% and HDFC Bank lost around 0.9%.

 
Shares of automobiles companies declined by up to 3% after the Reserve Bank of India (RBI) Governor Raghuram Rajan left interest rates unchanged for the fifth time in a row at the central bank’s bi-monthly policy review today.
 
M&M slumped around 2.5% after reporting a 13% decline in its total sales numbers in the month of November, 2014 compared to the same month last year.
 
Tata Motors lost more than 1% after reporting weaker than expected sales numbers for the month of November. It reported 2% increase in total sales at 41,720 units in November, 2014 as against 40,863 units in the same month last year.

 
Bajaj Auto declined more than 1%. The motorcycles sales of the company declined by 6% in November, 2014 compared to the same month last year though the commercial vehicles sales with a  48% surge in the same period were the highest for any November. 
 
Maruti Suzuki lost around 0.8%. Yesterday, the company announced a recall of 3,796 units of its recently launched mid-sized sedan Ciaz, manufactured till November 7, to replace a faulty part of clutch operation system.  Hero Motocorp lost around 1.5%.
 
Among other shares, all three listed state-owned oil marketing companies (OMC),-HPCL, BPCL and IOC- witnessed selling pressure, falling between 1% to 2.5% each after the government raised excise duty on petrol by Rs 2.25 a litre and on diesel by Re 1 a litre with immediate effect.

 
 Global Markets
 
Japanese shares closed at a seven-year high on speculations of buying in exchange traded funds (ETFs) by Bank of Japan as a part of its asset purchase scheme . Investors shrugged off a downgrade of Japan's sovereign debt credit rating by Moody's Investors Service. Nikkei ended 0.4% high.
 
Chinese shares gained on rebound in commodity and crude oil prices. Shanghai Composite index  gained more than 3% on hopes of further stimulus measures by Chinese central bank after the official manufacturing PMI came below expectations on Friday. Hang Seng  gained more than 1%.
 
Amid firm global cues, European shares have opened higher. FTSE 100 is trading with more than 1% of gains while CAC 40 is up 0.5%. Trimming early gains DAX is trading flat.