Sensex, Nifty end flat; pvt banks fall ahead of RBI policy

Moneycontrol Bureau

The market has seen consolidation on Monday ahead of RBI policy scheduled to be announced on June 2. FMCG, capital goods and select technology stocks gained while private banks were under pressure.

The 30-share BSE Sensex advanced 20.55 points to 27848.99 while the 50-share NSE Nifty fell 0.25 point to 8433.40. The broader markets closed flat too.

Though the benchmark indices have been in a consolidation mode, the market veterans are betting on equities in the long term.

Madhu Kela of Reliance Capital said there is not too much room left for further earnings disappointment. He expects 15 percent earnings growth in FY16. According to him, equities are still the best asset class with a three year horizon.

The Reserve Bank of India credit policy will be closely watched by the street on Tuesday as the clamour for a rate cut intensified. A CNBC-TV18 poll showed that 70 percent of the bankers, bond dealers and economists expect a 25 basis-point repo rate cut while SLR and CRR rates are expected to be kept unchanged.

Private banks like HDFC Bank and Axis Bank fell more than 1 percent while rival ICICI Bank was down 0.3 percent.

Sun Pharma was the biggest loser on Sensex today, down 9 percent after reporting disappointing set of earnings in Q4. The company said a decline in sales and higher integration costs impacted margins in Q4.

Country’s biggest commercial vehicle maker Tata Motors declined 2 percent ahead of its May sales data. But so far sales data indicated strong growth for companies like Maruti Suzuki, Eicher Motors and Ashok Leyland. Maruti reported a 14 percent growth in sales year-on-year while Ashok Leyland saw handsome 40 percent growth in commercial vehicle sales in May. Maruti rallied more than 2 percent while Mahindra & Mahindra closed flat with negative bias after reporting a 3 percent decline in May sales. Its tractor sales dropped 21 percent on yearly basis.

Larsen & Toubro topped the buying list on Sensex, up 3 percent as brokerage CLSA maintained buy rating despite weak operational performance from the company in Q4 earnings. Barclays also maintained overweight rating on the stock.

Among others, shares of Reliance Industries, ITC, Infosys, HDFC, HUL, Cipla, NTPC and Tata Power gained 1-2.8 percent while ONGC and Bharti Airtel declined 1.8 percent and 2 percent, respectively.

In global markets, Shanghai spiked 4.7 percent today despite China manufacturing data contracting for third straight month, an indication that investors are expecting further stimulus from the Chinese government to pump prime the economy.