Sensex falls over 150 points; rate-senstive shares drag

Index heavyweights ITC and HDFC were among the top losers

Markets have extended early losses and are trading near day’s low weighed down by rate-sensitive sectors like banks, realty and auto.

At 12:30 PM, the S&P BSE Sensex was down 175 points at 28,008 and the Nifty50 was down 60 points at 8,652. Broader markets are underperforming the benchmark indices- BSE Midcap and Smallcap indices are down almost 1%.

Rohit Gadia, Founder & CEO, CapitaVia Global Research adds,"The Reserve Bank of India left its benchmark repo rate unchanged at a five-year low of 6.5% in line with the expectation. Meanwhile, the government in consultation with the RBI has notified consumer price inflation target of 4% with upper tolerance level of 6% and lower tolerance level of 2% to be achieved by the RBI. Being the CPI inflation at around 5.8% in June which is near to upper limit target of 4% plus there is not much space to rate cut and it is likely to stay around this level. Going forward we may see space to open up for 0.25 basis point if only data supports for the same, chances of this however very low.”

Top losers from the Sensex pack are HDFC, Adani Ports, M&M, ITC and Hero MotoCorp, all dropping between 1%-2%.

Shares of public sector undertaking (PSU) banks have moved higher by up to 2% after Raghuram Rajan on Tuesday left interest rates unchanged at 6.5% at his final policy review meeting as Reserve Bank of India (RBI) governor.

State Bank of India (SBI), Canara Bank, Union Bank of India (BOI), Allahabad Bank, Syndicate Bank, Oriental Bank of Commerce, Punjab National Bank (PNB), Bank of Baroda (BOB) and Andhra Bank were up 2% each on the National Stock Exchange (NSE).

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Updated at 12 PM

Markets extended losses after Raghuram Rajan on Tuesday at his final policy review meeting as RBI governor kept interest rates unchanged.

At 12pm, the S&P BSE Sensex was down 114 points at 28,068 and the Nifty50 was down 41 points at 8,670.

The RBI kept the repurchase, or repo, rate unchanged at 6.5%. The Cash Reserve Ration (CRR) was also left unchanged at 4%.

“RBI kept the repo rate and CRR unchanged at 6.50% & 4.0% respectively along with retaining GDP forecast for FY17 at 7.6%. Move taken by RBI is very much in the expected line and this is the third monetary policy when rates remained unchanged. Moving further, we remained also focused on the RBI governor comment on GST, Economic growth, liquidity along with soaring inflation. RBI Governor is very optimistic on GST but as per him timely implementation could be a challenge. Additionally, along with liquidity issue in the system, Mr. Raghuram Rajan also sees upside risk to achieve the FY17 March inflation target of 5%. Hence, if we look on the overall picture, given scenario doesn’t augur well for the market. Keeping all the fact in view, we foresee near term pressure in the market. We believe interest rate sensitive stocks like Banking, Reality and Auto industry to witness some pressure going ahead.” says Abnish Kumar Sudhanshu, Director & Research Head, Amrapali Aadya Trading & Investments.

Index heavyweights ITC and HDFC were the top losers.

HDFC was down over 1%. The mortgage lender's life insurance arm HDFC Life  announced a merger with Max Life Insurance. The valuation of the merged life insurance entity will be around Rs 65,000 crore, and will be called HDFC Life.

Among other shares, SRF has rallied nearly 9% to Rs 1,670, also its record high on the National Stock Exchange (NSE) in intra-day trade, after the company reported 27% year-on-year (YoY) increase in consolidated net profit at Rs 144 crore for the quarter ended June 30, 2016 (Q1FY17), on back of strong operational performance.

Rural Electrification Corporation (REC) was trading 4% higher at Rs 233 on the BSE after the company announced the board will consider the proposal of bonus issue at their meeting scheduled for Thursday, August 11, 2016.
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(Updated at 9:30am)
Markets opened flat on Tuesday tracking their Asian peers and sluggish cues from Wall Street in overnight trades. Meanwhile, investors are keenly awaiting Reserve Bank of India's monetary policy review later today,  the last from governor Raghuram Rajan, whose term ends in early September.

At 9:30am, the S&P BSE Sensex was down 5 points at 28,177 and the Nifty50 was down 6 points at 8,705.

"After the sharp run up in the last few days, the markets might consolidate ahead of key monetary policy meet by RBI today," Angel Broking said in a note.

Foreign institutional investors were net buyers in equities worth Rs 1156 crore on Monday, as per provisional stock exchange data.

Idea Cellular dropped over 4% after the telecom major posted a 74% decline in the consolidated profit after tax (PAT) to Rs 220.4 crore for the quarter-ended June, compared with Rs 854.8 crore in the same period a year ago.

Index heavweights Reliance Industries and ITC were down 0.4%-0.8% each.

IT majors witnessed profit taking after gains in the previous session on the back of encouraging US jobs data. Infosys and TCS were down 0.3%-0.6% each.

HDFC was trading flat. The mortgage lender's life insurance arm HDFC Life  announced a merger with Max Life Insurance. The valuation of the merged life insurance entity will be around Rs 65,000 crore, and will be called HDFC Life. (Click here for the detailed report)


GLOBAL MARKETS

Most Asian markets were trading firm on Tuesday amid inflows from foreign funds while Chinese shares were trading flat after July inflation data was in line with forecast. Nikkei was up 0.1% while Shanghai Composite was up 0.2% while Hang Seng eased 0.3%.

US stocks ended flat with negative bias on Monday weighed down by healthcare stocks even as energy stocks firmed up tracking gains in crude oil prices. Meanwhile, investors also adopted a wait-and-watch stance ahead of key retail sales data later this week. The Dow Jones industrial average ended down 0.1% at 18,529, S&P 500 eased 0.1% at 2,181 and the Nasdaq settled 0.1% lower at 5,213.