The recovery post the Credit policy has proven to be short-lived. The markets have slipped once again; the Sensex is quoting at 18033, weaker by 99 points and the Nifty is at 5410, down 36 points.
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(Updated at 1224pm)
The markets recovered significantly post the rate hike, despite a rate hike and a hawkish stance by the Reserve Bank of India (RBI). The Sensex has now rebounded into the positive zone and is up 11 points at 18,143.
The central bank hiked the key rates for the tenth time since March 2010 to tackle the spiralling inflation. The key rates were hiked by 25 basis points. The repo rate has been raised to 7.5%, reverse repo rate now stands at 6.5% while the cash reserve ratio remains unchanged.
The RBI in its statement said, inflation persists at uncomfortable level. The rate hike has been in line with the street expectations.
In another macro economic development the primarry inflation for the week ended June 4 came in at 12.86% versus 11.52% (WoW). The food article inflation was recorded at 8.96% versus 9.01% (WoW).
Among the Sensex stocks Sterlite Industries was the top loser,down nearly 2% to Rs 159.
Wipro, Maruti Suzuki, Bajaj Auto, DLF, Reliance Industries, Larsen & Toubro, Jindal Steel, Infosys and HDFC Bank were also tradin lower by 0.8-2% each. Meanwhile Hindustan Unilever, State Bank of India, BHEL, Bharti Airtel, Reliance Infrastructure and ONGC were the notable gainers.
The rate sensitive sectors recovered from their intra-day low levels as the rate hike was in line with the street expectations. Bankex was trading marginally in the red down 4 points at 12,139. The realty and auto indices were also trading marginally lower.
Kotak Mahindra Bank, State Bank of India, Bank of Baroda, IDBI Bank, Yes Bank and Canara Bank were among the top gainers on the banking charts.
Meanwhile,the BSE IT index was the top sectoral loser, down 0.96% or 57 points at 5976. Oil & Gas index shed 87 points or 0.95% at 9109.
The overall breadth remained negative as 1,501 stocks declined while 960 stocks advanced.
