Caution over monetary policy review pulls equity market lower (Roundup)

The key indices of the Indian equity market -- S&P BSE Sensex and NSE Nifty50 -- ended in the negative territory on Monday after a volatile trade session.

According to market observers, both the key indices had gained nearly a per cent each during the initial trade hour but failed to sustain the northward trajectory as caution over Reserve Bank of India's (RBI) second monetary policy review of the fiscal eroded investor's risk-taking appetite.

The Monetary Policy Committee (MPC) of the RBI began its three-day meet from June 4 to 6 here on Monday.

Accordingly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) closed the day's trade in the red. It closed lower by 67.70 points or 0.63 per cent to 10,628.50 points from its previous close.

The Sensex of the BSE, which opened at 35,503.24 points, closed at 35,011.89 points, 215.37 points or 0.61 per cent lower from the previous session's close at 35,227.26 points.

The Sensex touched a high of 35,555.59 points and a low of 34,982.25 during the trade session.

"Markets corrected further on Monday after a positive morning session led by banking and realty stocks," said Deepak Jasani, Head of Retail Research for HDFC Securities.

"Investors turned cautious ahead of RBI monetary policy review meet which began today. Broad market indices like the BSE Mid Cap and Small Cap indices fell more, thereby underperforming the main indices."

Geojit Financial Services Head of Research Vinod Nair said: "Market erased early gains despite positive momentum in the global market as investors are gradually factoring a rate hike ahead of RBIs monetary policy."

"As the result season is over, market participants are keen on macros, the movement of oil price and rupee will remain the key trigger. On the other hand, the tailwinds caused by prognosis of good monsoon and uptick in economic activity in Q4FY18 will boost consumption led story and rural economy."

On the currency front, the Indian rupee weakened against the US dollar to 67.11-12, from its previous close at 67.06 per greenback.

Sector-wise, the S&P BSE banking index fell by 422.97 points, the consumer durables index was down by 376.37 points and the capital goods index ended 236.38 points lower.

On the other hand, S&P BSE IT index gained 55.34 points followed by the metal index which rose by 31.70 points and the TECK index ended 22.53 points higher.

The major gainers on the Sensex were Dr Reddy's Labs, up 2.86 per cent at Rs 1,996.95; Infosys, up 1.59 per cent at Rs 1,239.60; Mahindra and Mahindra, up 1.45 per cent at Rs 914.60; Tata Steel, up 1.18 per cent at Rs 566.95; and Reliance Industries, up 1.09 per cent at Rs 939.35 per share.

The top losers were HDFC Bank, down 2.99 per cent at Rs 2,046.55; Bharti Airtel, down 2.81 per cent at Rs 371.85; Adani Ports, down 2.47 per cent at Rs 377.60; PowerGrid, down 2.06 per cent at Rs 201.65; and Hindustan Unilever, down 1.73 per cent at Rs 1,562.20 per share.

--IANS

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