Markets end lower as RBI disappoints

SBI, ICICI Bank and HDFC Bank among the top Sensex losers

Benchmark share indices ended over 1% down on Monday dragged by bank shares, after the RBI at its mid-quarter policy review today, disappointed the market by maintaining a cautious stance on key policy rates and cash reserve ratio in view of high inflation levels.

The 30-share Sensex ended down 244 points or 1.4% at 16,706 and the Nifty ended down 75 points at 5,064.

In a post market hours development, ratings agency Fitch revised its India outlook to negative and affirmed the rating of BBB-.

The agency said growth would deteriorate if reforms were not hastened. It also said the country faced slowing growth and elevated inflation.

The Reserve Bank today kept policy rates unchanged in view of rising inflation and global economic uncertainty

RBI, in its mid-quarterly review of the monetary policy said the future action would depend upon on external factors, domestic developments and inflationary risks.

Experts were expecting the Reserve Bank to cut the lending rate (repo) by at least 0.25% and were also looking forward to further cut in CRR to infuse more liquidity in the financial system.

The Asian markets jumped higher in trades today after the Greeks voted pro bailout party to the power. Victory over radical leftists staved off the prospect of the debt-laden country leaving the euro and brought relief to global markets. The Hang Seng, Shanghai Composite and Nikkei jumped 0.4-1.7% each.

Investors breathed a sigh of relief on Monday after Greece's election eased fears that Europe's currency bloc would break up, boosting shares and sending the euro to a one-month high.The European markets were trading higher. The CAC40, DAX and FTSE100 were trading higher by 1% each.CAC 40 index jumped 0.5% to 3,102. DAX advanced 53 points or 0.9% to 6,282 levels and the FTSE was up 0.4% at 5,503 levels.

Back home, most of the Sensex stocks barring a few ended lower in trades today. Rate sensitive stocks were amongst the worst hit.

Selling pressure was visible across the board. The BSE Banking index- bankex was the top sectoral loser, down 3.2% or 366 points to close at 11,220 levels. Realty, FMCG, PSU, power, metal, capital goods and oil & gas indices also ended lower by 1-3% each.

State Bank of India was the top loser among the Sensex stocks, down 4.4% to Rs 2,087. ICICI Bank, HDFC Bank, BHEL, Maruti Suzuki, HDFC, Mahindra & Mahindra, Tata Motors, L&T and Hero MotoCorp  were the top losers from this rate sensitive pockets. Index heavyweights Reliance Industries, Infosys, TCS and Wipro also ended lower in trades today. On the other hand, Tata Steel and Bajaj Auto were among the notable gainers.

From the banking space, IDBI Bank was the top loser, down 5% to end at Rs 87. PNB, Canara Bank, Bank of Baroda, Axis Bank, Yes Bank and Bank of India also closed lower by 2-4% each.

Among the individual stocks, Allcargo Logistics ended higher by 7% at Rs 135 in otherwise weak market, on announcing buyback of its own equity shares from the public shareholders.

National Aluminium Company (Nalco) rallied 3.4% to Rs 60 on reports that the government has initiated the process of 10% stake sale in state-owned aluminium company. The government currently holds 87.15% stake, is proposed to raise around Rs 12,000 crore through disinvestment in Nalco.

The broader markets also ended lower. The BSE mid-cap and small-cap indices slipped 1% to close at 5,895 and the mid-cap indices shed 0.7% to end at 6,307 levels.

The overall breadth was negative as 1,688 stocks declined while 1,001 stocks advanced.