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Jul 31, 2012, 04.58 PM IST
The BSE Sensex rebounded quite nicely in the last couple of hours of trade following stability in global markets. The benchmark fell as much as 140 points intraday after the Reserve Bank of India raised inflation forecast to 7% from 6.5% and revised gross domestic product growth lower to 6.5% from 7.3% for the financial year 2012-13
The market seemed to have priced in the RBI policy that was majorly on expected lines. The central bank kept repo rate and cash reserve ratio unchanged while cut statutory liquidity ratio (SLR) by 1% to 23%. Experts feel the change in SLR won't make much difference to the market as banks already maintained SLR more than 25%.
Chaitanya Pande, head of fixed income at ICICI Prudential AMC said, "As expected, Reserve Bank of India (RBI) has left policy rates unchanged focusing on the stickiness of inflation while highlighting the growth slowdown. Given the uncertainty on the monsoons and the lack of any pass-through on petro products, RBI’s hands were more or less tied in pushing out the rate cutting cycle by a quarter."
Bankers said they would not change deposit and lending rates in near term. Even the higher inflation indicated that the RBI may not go for a rate cut in next policy meet that scheduled for September 17.
Country's largest lenders State Bank of India and ICICI Bank were down 1.3% and 0.37%, respectively while housing finance company HDFC rallied 2%.
Oil & gas producers Reliance Industries and ONGC surged 1.86% and 3.37%, respectively.
Technology majors TCS, Infosys and Wipro went up 0.7%-1.7%. Top commercial vehicle maker Tata Motors rebounded quite nicely, rising 2% while top car maker Maruti Suzuki gained 1%.
Two-wheeler major Hero Motocorp was down 1.24% and utility vehicle manufacturer M&M went down 0.56%.
Healthcare stocks like Cipla (ahead of numbers for Q1) and Sun Pharma were up 1-1.7% whereas Dr Reddy's Labs fell 0.7%.
Among metals stocks, Sterlite Industries shot up 2.6%; Tata Steel and Hindalco gained around 1% whereas Jindal Steel slipped 1%.
Country's largest telecom operator Bharti Airtel topped the selling list, losing 2.77%.
In the second line shares, Titan Industries dropped more than 4% after lower than expected numbers in the quarter ended June 2012. Hexaware Tech declined 2.44%, even after better than expected numbers in June quarter.
Sun TV Network rose 2% as the company signed agreement with Tamil Nadu Arasu Cable TV Corporation Ltd, an undertaking owned by the Government of Tamil Nadu engaged in the business of providing signals to cable operators in the state of Tamil Nadu
Deccan Chronicle tanked 7.5% as IFCI filed winding up petition against DCHL at Andhra HC. Manappuram Finance surged more than 9%.
On the National Stock Exchange, advancers outnumbered decliners by 741 to 657.
Indian shares recouped losses led by buying interest in ICICI Bank and technology stocks. Other index heavyweights like Reliance Industries and L&T trimmed their losses. European markets were flat in early trade.
The BSE Sensex and NSE Nifty extended fall amid volatility as bankers feel the cut in lending and deposit rates won't be possible in near term. Even the raising of inflation forecast to 7% for FY13 from 6.5% by the Reserve Bank of India indicated that the central bank may not go for a rate cut.
May 22 2013, 13:11
- in MARKET OUTLOOK
May 22 2013, 10:44
- in Economy