Nifty stays below 6000; DLF down 11%, Sun Pharma gains

Moneycontrol Bureau
Live Market Commentary

02:55pm Outperformer

Jet Airways shares gained 1.7 percent. Citi says buy the stock with a target price of Rs 715.

According to the brokerage house, Tata-SIA venture won't impact FY14-15 financials of the company.

Tata's and Singapore Airline on Thursday have inked a memorandum of understanding (MoU) to launch a new full service airline with initial capital of a USD 100 million. The Tata’s will hold 51 percent and Singapore Airlines will get 49 percent.

Also Read - Now better prepared for Fed taper: RBI guv Rajan

02:45pm Market Expert

The Sensex is down 438.75 points or 2.13 percent at 20207.89, and the Nifty is down 128.75 points or 2.11 percent at 5986.80.

India’s economic situation is not exciting and inflation continues to be a very large concern for us, so, in this scenario, RBI policy is balanced and pragmatic, Tushar Pradhan, CIO, HSBC AMC said.

The policy announcement didn’t auger well for the market and it corrected. But, Pradhan feels going ahead market will take cues from the fact that RBI is quite accommodating from a growth point of view.

He further added that from valuations perspective, the market has not hit the bottom yet. "We should see markets trade in a range before we take any direction. But looking at the overall economic cycle, we are closer to the bottom rather than closer to the peak," he told CNBC-TV18 in an interview.

Also Read - Fed likely to begin taper by December, says Ken Goldstein

02:30pm Major losers

Realty stocks hit the most on unexpected hike in repo rate; the BSE Realty Index fell 6 percent. DLF, the realty major, crashed 11 percent.

IDFC, Punjab National Bank, IndusInd Bank, Ranbaxy Labs, ICICI Bank, L&T, Hindustan Unilever and State Bank of India are biggest losers among frontliners.

However, Sun Pharma, Wipro, GAIL, Dr Reddys Labs, GAIL, Lupin and Power Grid outperformed.

HCL Technologies is the biggest gainer, rising 4 percent after the Foreign Investment Promotion Board hike FDI limit in the company.

Also Read: Continue to see extreme liquidity tightness: SBI head

02:15pm The market plummeted today after RBI surprised the street by raising repo rate by 25 basis points, weighed down majorly by rate sensitives.

The Sensex is down 522.75 points or 2.53 percent at 20123.89, and the Nifty is down 157.15 points or 2.57 percent at 5958.40.

High inflation prompted the central bank to hike repo rate by 25 basis points to 7.5 percent, but the bank left cash reserve ratio unchanged at 4 percent though the minimum CRR requirment is cut from 99 percent to 95 percent.

Marginal Standing facility (MSF) rate is also cut by 75 basis points to 9.5 percent. Governor Raghuram Rajan says that RBI will watch the inflation rate for 6-12 months and would like to bring the rate down to below the RBI's aim of 5 percent.

A repo rate hike by 25 basis points does not make much of a difference because the short-term rates have been much higher, says Nirmal Jain, chairman, IIFL.

According to him, easing of liquidity due to reduced marginal standing facility (MSF) window will have a much better impact on the market or at least on banks' sentiment. So the market reaction right now is just kneejerk, he says.