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MARKET WRAP: Sensex ends 356 pts lower on RBI rate hike, trade war fears

Among sectoral indices, the Nifty Auto index settled nearly 1.5% down due to a fall in share prices Motherson Sumi Systems and Maruti Suzuki.

SI Reporter  |  New Delhi 

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MARKET COMMENT Jayant Manglik, President, Religare Broking Markets started on weak note and lost nearly a percent in the end, taking breather after the recent surge. Participants were in the profit taking mood from the beginning, citing weak global markets and overhang of the rate hike further deteriorated the sentiment. Almost all the sectoral indices, barring Pharma, closed lower while broader market indices managed to end on flat note.   We reiterate our "buy on dips" approach in Nifty till 11,100 is intact. Stocks are witnessing volatile swings across the board, thanks to the ongoing earnings season and require extra caution during selection. Private banking counters still top our preferred list along with select stocks from auto, pharma, FMCG space for short term trades. We advise keeping close watch on earnings and cues from the world markets for further clarity Stock quote: Maruti Suzuki ends 2.27% lower on NSE Nifty Auto index ends 1.44% lower. Top losers: COMPANY LATEST PREV CLOSE LOSS() LOSS(%) MOTHERSON SUMI 304.10 314.60 -10.50 -3.34 MARUTI SUZUKI 9130.05 9341.60 -211.55 -2.26 APOLLO TYRES 285.20 291.60 -6.40 -2.19 M & M 910.95 929.75 -18.80 -2.02 TATA MOTORS 260.25 265.05 -4.80 -1.81 Nifty sectoral losers of the day BSE Sensex: Bharti Airtel, Maruti Suzuki among top losers of the day, Power Grid Corp top gainer Markets at close The S&P BSE Sensex ended at 37,165, down 356 points while the broader Nifty50 index settled at 11,245, down 101 points.

The benchmark indices ended nearly 1per cent lower on Thursday following the 25 bps hike in repo and reverse repo rates by the Reserve Bank of India (RBI) on Wednesday. That apart, weak global sentiment on account of rising trade war fears also impacted sentiment.

The S&P BSE ended at 37,165, down 356 points while the broader Nifty50 index settled at 11,245, down 101 points. Among individual stocks, Bharti Airtel settled 3.25 per cent lower at Rs 371.20, while Maruti Suzuki ended 2.15per cent down at Rs 9,140.

The Auto index settled nearly 1.5 per cent down due to a fall in share prices Motherson Sumi Systems and Maruti Suzuki. The Realty index ended over 1.5 per cent lower due to Godrej Properties and DLF.

MONETARY POLICY

On Wednesday, the RBI hiked policy rates for the second time in a row on fears of rising inflation rates. Economists now expect the central bank to go in for a prolonged pause and wait to see the impact of the globally evolving scenario. It cautioned that India needed to “run a tight ship” to avoid getting affected by the currency war that had started all over the world. It projected inflation at 4.6 per cent in the second quarter, and 4.8 per cent in the second half of the financial year 2018-19, with risks evenly balanced.

On the other hand, the US Federal Reserve kept interest rates unchanged on Wednesday and characterized the economy as strong, keeping the central bank on track to increase borrowing costs in September. The said economic growth has been rising strongly and the job market has continued to strengthen while inflation has remained near the central bank’s 2 percent target since its last policy meeting in June, when it raised rates.

GLOBAL MARKETS

Asian stocks tumbled on Thursday as the latest escalation in the Sino-US trade war hit Chinese shares, while global bond were rattled by increased borrowing by Washington and Japan's new tolerance for higher yields.

Japan's Nikkei declined 1.1 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.5 per cent, dragged down by a 2.2 per cent fall in Chinese H-shares. The CSI 300 index of China's A-shares dropped 3 per cent.

(with wire inputs)

First Published: Thu, August 02 2018. 08:12 IST
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MARKET WRAP: Sensex ends 356 pts lower on RBI rate hike, trade war fears

Among sectoral indices, the Nifty Auto index settled nearly 1.5% down due to a fall in share prices Motherson Sumi Systems and Maruti Suzuki.

The benchmark indices ended nearly 1per cent lower on Thursday following the 25 bps hike in repo and reverse repo rates by the Reserve Bank of India (RBI) on Wednesday. That apart, weak global sentiment on account of rising trade war fears also impacted sentiment.

The S&P BSE ended at 37,165, down 356 points while the broader Nifty50 index settled at 11,245, down 101 points. Among individual stocks, Bharti Airtel settled 3.25 per cent lower at Rs 371.20, while Maruti Suzuki ended 2.15per cent down at Rs 9,140.

The Auto index settled nearly 1.5 per cent down due to a fall in share prices Motherson Sumi Systems and Maruti Suzuki. The Realty index ended over 1.5 per cent lower due to Godrej Properties and DLF.

MONETARY POLICY

On Wednesday, the RBI hiked policy rates for the second time in a row on fears of rising inflation rates. Economists now expect the central bank to go in for a prolonged pause and wait to see the impact of the globally evolving scenario. It cautioned that India needed to “run a tight ship” to avoid getting affected by the currency war that had started all over the world. It projected inflation at 4.6 per cent in the second quarter, and 4.8 per cent in the second half of the financial year 2018-19, with risks evenly balanced.

On the other hand, the US Federal Reserve kept interest rates unchanged on Wednesday and characterized the economy as strong, keeping the central bank on track to increase borrowing costs in September. The said economic growth has been rising strongly and the job market has continued to strengthen while inflation has remained near the central bank’s 2 percent target since its last policy meeting in June, when it raised rates.

GLOBAL MARKETS

Asian stocks tumbled on Thursday as the latest escalation in the Sino-US trade war hit Chinese shares, while global bond were rattled by increased borrowing by Washington and Japan's new tolerance for higher yields.

Japan's Nikkei declined 1.1 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.5 per cent, dragged down by a 2.2 per cent fall in Chinese H-shares. The CSI 300 index of China's A-shares dropped 3 per cent.

(with wire inputs)

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