The weakness was largely visible in banking and automobile names as investors reacted to the central bank’s announcement
After several sessions of rally in the recent past, including fresh milestones being hit, equity benchmarks on Wednesday took a breather. The Sensex managed to snap its 4-day winning streak, while the Nifty ended just below 11,350. The downward move followed Reserve Bank of India’s decision to hike key interest rates by 25 basis points to 6.5 percent.
The weakness was largely visible in banking and automobile names as investors reacted to the central bank’s announcement. The Nifty Bank managed to slip nearly 170 points.
Among broader markets, midcaps had a good day of trade, which managed to end marginally in the green. They were outperforming the benchmarks during the course of session. HDFC Twins & ICICI Bank dragged the market, while TCS, Reliance & ITC offered support.
The Sensex ended down by 84.96 points or 0.23% at 37521.62, while the Nifty ended lower by 10.30 points or 0.09% at 11346.20. The market breadth was narrow as 1,368 shares advanced, against a decline of 1,294 shares, while 161 shares are unchanged.
“Domestic equity indices opened the day on a positive note, but eventually succumbed to selling pressure at higher levels. The central bank maintained its neutral stance while reiterating that inflation continues to be a major consideration in rate decision. While market reaction to the rate hike was muted, we did see some sharp selling pressure in interest rate sensitive stocks,” Abhijeet Dey, Senior Fund Manager – Equities, BNP Paribas Mutual Fund said in a statement.
Stocks in news
Rate sensitive stocks were in focus as they saw some weakness, especially after the central bank’s decision. The Bank Nifty and PSU bank index were mixed, while auto stocks took a hit, while real estate socks were in the green.
Tata Motors slipped saw a sharp recovery after falling around 6 percent after the global automaker reported a consolidated net loss for the quarter ended June at Rs 1,862.57 crore, missing estimates by a huge margin. Most global brokerage firms maintain their rating but some of them slashed their target price for the global auto giant as well as earnings estimates for FY19-20.
Shares of Reliance Industries touched 52-week high of Rs 1,202.95, rising 0.45 percent as company won an arbitration award worth Rs 56.44 crore.Shares of Dabur India gained 3 percent as investors cheered its June quarter performance. The fast-moving consumer goods (FMCG) major reported 25 percent year-on-year (YoY) rise in consolidated net profit for the June quarter at Rs 329.2 crore as
against Rs 264.1 crore posted in June FY18.
Share price of Mahanagar Gas added 4 percent as company reported strong numbers in the quarter ended at June 2018. The company's Q1 profit increased by 3.2 percent to Rs 128 crore versus Rs 124.3 crore in the same quarter last fiscal.
Bajaj Auto’s shares fell around half a percent even after the company reported strong sales for the month of July.
European markets traded mixed as investors looked for cues in trade tensions even as optimism around good earnings lingered. Stoxx 600 was flat with the different sectors moving in opposite directions.Meanwhile, market in Asia closed mixed as investors also took note of US-China trade tensions as well. The Nikkei 225 advanced 0.86 percent, or 192.98 points, to close at 22,746.70.