Sensex falls over 150 points; Nifty tests 8,100

Benchmark indices have slumped after the central bank kept the key rates unchanged at 6.25%.
 
At 14:32 pm, the S&P BSE Sensex was trading at 26,236, down 157 points, while the broader Nifty50 was ruling at 8,100, down 42 points. BSE Midcap index rose 0.39%, while BSE Smallcap index advanced 0.39%.
 
Market breadth depicted strength with 1,355 advances over 874 declines on the BSE. 130 stocks remained unchanged.
 

Almost a month after demonetisation, RBI will have its bi-monthly policy meet where the market is expecting a reduction in repo rate. Two out of the 12 economists, bond market dealers and rating agency officials polled by Business Standard say RBI will go for at least a 25 basis-point cut.

 
"Apart from the policy rate outcome, it will be an important guidance on the RBI’s stance on both liquidity management and possibly its growth outlook especially after the demonetisation drive," said brokerage HDFC Securities in a research note. 
 
Sectors and Stocks
 
Interest rate sensitive shares from the sectors such as banking, automobiles and real estate were in focus ahead of the RBI policy.
 
Eicher Motors, Hero MotoCorp, Maruti Suzuki India, Mahindra & Mahindra and Tata Motors from automobiles, State Bank of India (SBI), ICICI Bank, YES Bank, Federal Bank and Bank of Baroda from banking were up around 1% each on BSE.

 
Unitech, Sobha, Prestige Estates and Oberoi Realty from the real estate sector were up in the range of 1%-4% on the BSE.
 
Among losers, Sun Pharma shares plunged 5% in today’s trade on USFDA concerns. According to reports, the US health regulator has issued 14-page observation letter after its Halol plant inspection. BSE healthcare index also fell over 1%.
 
HDFC was the top gainer on BSE Sensex, up 2.91% followed by Adani Ports which gained 2.37%.
 
Oil & Gas was the top sectoral gainer on BSE led by gains in IOC (2.56%), HPCL (2.01%), BPCL (1.92%) and Petronet LNG (1.50%).

 
Global Markets
 
Asian shares edged up on Wednesday as investors covered short positions and looked to the upcoming policy meeting of the European Central Bank for comfort after a referendum defeat tipped Italy into political turmoil.
 
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.25% while Japan's Nikkei gained 0.4%.
 
Australian shares rose 0.7% despite data showing the economy contracted in the third quarter. While rate futures imply scant chance of another interest rate cut in the next few months, all thought of a hike has also vanished.
 
The MSCI's broadest gauge of the world's stock markets rose to its highest level in almost two months, having risen 3.4% from its November low.

 
Wall Street climbed helping the Dow set another record closing high.