The Indian equity market extended the opening losses on August 11 amid subdued sentiment after the Reserve Bank of India's revised Q2 inflation forecast offset a softer-than-expected US consumer price index for July.
The market had been bogged down by the RBI's decision to sharply raise the incremental CRR for banks and its Q2 inflation forecasts since August 10, the impact of which was felt in today's session as well. The market continued to inch lower despite encouraging numbers coming from the US inflation front. The July consumer price index for the US increased by 3.2 percent, slower than the estimate of a 3.3 percent rise.
It did little to cheer investors in the domestic market as they continued to books profits off the stellar run seen in the past month.
"While the RBI's status quo on interest rate didn't come as a surprise, the MPC's cautious tone and no signal of any rate cut by this year-end hurt the market sentiment. Inflation continues to be the key concern area and the RBI remaining watchful of the developments in key global economies indicates that investors' appetite for equities will be measured in the near to medium term," said Shrikant Chouhan, Head of Research (Retail) at Kotak Securities.
Around noon, the Sensex was down 306.35 points, or 0.47 percent, at 65,381.83, and the Nifty was down 91.30 points, or 0.47 percent, at 19,451.80.
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Most sectors, including banks, pharma, metals, energy and infra were struggling in the red, while PSU banks were the only outliers, shining in the green.
The spotlight was on HCL Technologies, which recorded its best day in 14 months after it soared over 4 percent in trade. The company bagged a $2.1 billion deal with US telecom major Verizon Business. The deal, which is expected to have a positive revenue impact for the next six years, bolstered investor sentiment, making the stock top the list of gainers on the Nifty50.
Several names in the small and mid-cap space like Supreme Industries, REC, Ashok Leyland also soared to their 52-week highs the announcement that they along with five other firms will be added to the MSCI India Index.
Earnings led action also took place, with Suryoday Small Finance Bank, GMM Pfaudler, NBCC (India), and Global Health reacted positively to their robust quarterly results. In contrast, Sequent Scientific, MTAR Technologies, Mazagon Dock Shipbuilders and Apollo Tyres slumped after reporting disappointing growth numbers in Q1.
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