RBI Polcy: Markets pare losses to turn flat

BSE Bankex was down 1% dragged by PNB, Bank of Baroda, IndusInd Bank and Axis Bank

Benchmark indices pared losses to turn flat as RBI kept repo rate unchanged at 6.25%. The Central Bank also changed its policy stance to 'Neutral' from 'Accommodative'. FY17 GVA target was lowered to 6.9% from earlier target of 7.1%.

MSF, Bank rate was left unchanged at 6.75% while Reverse Repo rate stayed at 5.75%. Rate on hold to assess demonetisation impact on inflation, output gap, said RBI adding that expect CAD to be below 1% of GDP for FY17.

 

Sensex fell as much as 160 points as soon as the policy was announced while Nifty breached its crucial 8,750 levels. Earlier this week, both indexes had hit a four-month high on rate-cut hopes.

 

At 3:17 pm, the S&P BSE Sensex was trading at 28,317, down 17 points, while the broader Nifty50 was ruling at 8,776, up 8 points. BSE Midcap index gained 0.5%, while BSE Smallcap index was up 0.2%.

 

Market breadth depicted fall with 1,372 advances over 1,438 declines on the BSE. 144 stocks remained unchanged.

 

BSE Bankex yesterday snapped a four-day rally and continued to trade in negative, down 1% dragged by PNB, Bank of Baroda, IndusInd Bank and Axis Bank. All Banking stocks were trading in negative post the policy review.

 

M&M, Coal India, Cipla, TCS and Tata Motors were top movers on BSE Sensex while Dr Reddy’s, ITC, Bharti Airtel, Axis Bank and Infosys were the biggest laggards.

 

Tata Steel hits a two-year high of Rs 487, up 3% on the BSE in early morning trade after the company reported a consolidated net profit of Rs 232 crore for the quarter ended December 2016 (Q3), against loss of Rs 2,748 crore in a year ago quarter. The stock was currently trading 0.8%.

 

FMCG stocks were among the biggest decliners with cigarette maker ITC Ltd (ITC.NS) falling as much as 1.7% after it hit a record high in the previous session.

 

Infosys shares fell around 1% after media reports that the founders NR Narayana Murthy, Kris Gopalakrishnan, and Nandan Nilekani among others are learnt to have raised concerns over the governance of the company.