Markets end lower on cautious stance by RBI

Bank shares, Reliance Ind, ITC among top Sensex losers

Benchmark share indices ended over 1% down on Monday, 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 provisionally ended down 237 points or 1.4% at 16713 and the Nifty ended down 70 points or 1.4% at 5,069.

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(Updated at 14:52 hrs)

Markets have extended losses in the late noon deals on the back of intense selling pressure visible in the rate sensitive pockets. The Sensex has plunged 400 points from the intra-day high levels to 16,665 and the 50-share Nifty is down 92 points at 5,046 levels.

The Reserve Bank of India decided to keep the key rates unchanged dashing the hopes of a rate cut which the analysts were expecting given the slowdown in the economic growth.

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

"Future actions will depend on a continuing assessment of external and domestic developments that contribute to lowering inflation risks," RBI said.

The European markets were trading higher. The CAC40, DAX and FTSE100 were trading higher by 1% each.

In Asia, the markets ended higher with Hang Seng, Nikkei and Shanghai Composite gaining 0.4-1.7% each.

Back home, Sterlite Industries, State Bank of India, ICICI Bank, HDFC Bank, Gail India, Dr Reddy's Labs, ITC and Hindalco are the top losers among the Sensex stocks. On the other hand, Tata Steel, Bajaj Auto and Coal India are among the notable gainers.

Selling pressure is visible across the board. The rate sensitive stocks have cracked in trades so far. The BSE bankex is the top sectoral loser, down 3.4% or 389 point5s at 11,197. The BSE realty index is down 3% at 1,573 levels. Capital goods and auto indices are also down 1-2% each each.
Among the other indices, FMCG, consumer durables, metal, teck, IT, and PSU indices are down 0.7-1.6% each.

The broader markets are in line wit the benchmark indices. BSE mid-cap index is down 1.2% at 5,886 and the small-cap index is down 0.8% at 6,301 levels. 

The overall breadth is extremely negative as 1,708 stocks are declining while 882 are advancing.