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Markets opened lower but recovered soon in the morning trades on back of buying witnessed in software exporters, however, concerns that the Reserve Bank of India (RBI) might increase interest rates again in the near future to rein in persistently high inflation loomed large.
Rate-sensitive stocks, especially banking ones, led the fall in equities, with State Bank of India dropping per cent and HDFC Bank 2.4 per cent. Global markets also traded weak.
At 9:25 AM, the BSE Sensex was up 36 points at 19,927 while the NSE Nifty was up 6 points, at 5,896
In a surprise move, RBI Governor Raghuram Rajan had on Friday raised the key policy rate by 25 basis points, while emphasising the need to bring down inflation.
The broader markets traded almost flat with mid caps and small-caps tad up by 0.1% on the BSE.
The market breadth was mixed. Out of 692 shares traded so far, 305 stocks declined while 342 advanced on the BSE.
Rupee
The rupee weakened owing to month-end dollar demand from importers and bond yields could rise further as the impact of the 25 basis points increase in the repo rate will linger.
At 9:20AM, rupee traded at 62.89 per US dollar compared to yesterday’s close of 62.60 per USD.
GLOBAL MARKETS
Asian share markets got off to a soggy start on Tuesday while currencies dithered in recent ranges as a dearth of major
economic news left investors to chew on the outlook for monetary policy in the United states and Europe.
Japan's Nikkei fell 0.6% to 14,660, China's Shanghai Composite declined 1% to 2,199, Singapore's Straits Times dropped 0.1% to 3,209 today.
Japan's Nikkei fell 0.6% to 14,660, China's Shanghai Composite declined 1% to 2,199, Singapore's Straits Times dropped 0.1% to 3,209 today.
STOCK MOVERS
Domestically, among the key sectoral indices, banks, PSU, metal and powerindices dropped while realty, consumer durables, capital goods indices gained on the BSE.
The gainers were Wipro and TCS gaining 1.2% and 0.5% respectively, Tata Motors added 0.5% on the BSE.
The laggards were Jindal Steel falling 2.8%, SBI and HDFC Bank were down 3% and 2.5% on the BSE.
