Markets snap 4-day gains; RBI policy in focus

Markets ended lower this Friday on back of profit-booking in rate-sensitive sectors and index-heavyweights after benchmark indices surged for four consecutive trading days.

Meanwhile, investors also preferred to remain on the side-lines ahead of the Reserve Bank of India’s monetary policy meet next week.

“25 basis points seems very certain. Further fall in inflation could be the key to the rate policy. Market may react negatively on 25 basis point cut as a knee jerk reaction. 50 bsp cut could bring stability and much required relief,” said Kishor Ostwal, CMD, CNI Research.

Today, the Bombay Stock Exchange's 30-share index Sensex fell 120 points to end at 19,286.72 while the National Stock Exchange's 50-share Nifty declined 44.85 points at 5,871.45.

The 30-share sensitive index Sensex has risen 1,114 points in past 2 weeks while 50-share Nifty surged 365 points since April 12 on back of inflows from foreign institutional investors who have net bought Rs 29 billion worth of shares this month so far.

Global risk appetite was, however, firm on hopes major central banks will ease monetary policy further or continue to keep it loose for long.

Asian markets ended mixed with China’s Shanghai Composite Index down 1% to 2,178, Hong Kong’s Hang Seng rose 0.5% to 22,547, Singapore’s Straits Times added 0.2% to 3,345 while Japan’s Nikkei was down 0.3% to 13,884.

Back home, the key sectoral indices such as IT, oil & gas, FMCG, real-estate, power and bankex declined while automobile and capital goods sector gained on the BSE.

The gainers on the Sensex included, Maruti Suzuki soaring 5%, Bharti Airtel gained 4.7%, Bajaj Auto rose 3%, GAIL is up 1.5% while HDFC added 1.4% on the BSE.

The laggards included counters such as Reliance Industries declined 3%, Jindal Steel fell 2.8%, HUL shed 2.7%, TCS dropped 2.3% on the BSE.

The key notable movers included, ICICI Bank which dropped 3% to Rs 1,144 today on back of selling pressure witnessed in banking stocks ahead of May 3rd RBI meet.

India’s biggest private-sector lender said net profit increased to Rs 2,304 crore for the quarter ended March 31, 2013, an increase of 21% from Rs 1,902 crore in the same period last year.

Net Interest Income increased to Rs 3,803 crore from Rs 3,105 crore, an increase of 22%.

Jindal Steel and Power (JSPL) slumped 4% at Rs 314 after reporting 35% year-on-year (yoy) fall in its consolidated net profit at Rs 753 crore for the quarter ended March 2013 (Q4) due to higher interest burden and lower sales realizations.

LIC Housing Finance gained 6% to Rs 247, bouncing back 6% from intra-day low, on reporting 24% year-on-year (yoy) growth in net profit at Rs 316 crore for the fourth quarter ended March 2013 (Q4).

Maruti Suzuki India surged 5% to Rs 1,673, its highest level since October 2009, after reporting a better-than-expected 79% year-on-year (yoy) jump in net profit at Rs 1,148 crore for the quarter ended March 2013 (Q4) on back of higher sales.

The broader markets dropped with mid-caps and small-caps falling 0.5-0.6% on the BSE.

The market breadth was negative. Out of 2,441 stocks traded, 1,347 stocks declined compared to 959 advances on BSE.