Mkt pins hopes on Wednesday's Fed meet: Udayan

CNBC-TV18 managing editor Udayan Mukherjee explains that the RBI's credit policy seems to have disappointed the street and that was the big talking point today. The economic logic for a rate-cut was never very high, but the street had trumped up a lot of expectations since last week.

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Therefore the bond and the stock market were both disappointed as the RBI did not move on the repo rate or on the CRR. Early in the morning, the trade started off well after the Greek elections and the Asian markets were all up about a couple of percentage points.

The market started the day with a 1% rally, got close to 5,200, but the RBI policy forced the markets to sell off quite completely. By the end of the day, the Nifty was down 75 points to about 5,060 and trading volumes surged to about Rs 2.5 lakh crore- a significant volume to have been recorded today.

The breadth was quite bad, 1:3 in terms of advance-to-decline and the rate-sensitives led the fall. So the banks were down sharply. The bank index was down 3.5% today with big losses in stocks like SBI and ICICI Bank. DLF, BHEL and Reliance were the losers and HCL Tech, on all sorts of speculation about the CEO resigning, took a bit of a drubbing.

In the midcaps too, all the high beta stocks like HDIL, Unitech, GMR, GVK, Adani, Nagarjuna Constructions were down. ADAG stocks like Reliance Communication and Reliance Capital came off quite a bit. Many PSU banks like Dena Bank, DCB, UCO Bank and Karnataka Bank were also down quite a bit.

Textile shares like S Kumars and Arvind fell off. Kingfisher and United Spirits, which rallied last week, also fell off. Tinplate was one of the few stocks which rallied today because of that offer from Tata Steel.

It was an otherwise disappointing session for the market. The question remains if the market can find its trading groove with the Fed's announcement on Wednesday, which is expected to be the next big trigger for the market.