Hawkish RBI stance spooks markets

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Hawkish RBI stance spooks markets
Markets today dropped after the RBI kept interest rates on hold, while clearly elucidating that rate cuts would come only after it was convinced that inflation has dropped. Traders also lightened positions ahead of the budget.

The BSE Sensex closed the day at 17675 points, down 243 points, while the NSE Nifty closed the day at 5380 points, down 83.50 points from its previous close.

Among the major losers today were the banking stocks which reacted to the RBI decision to keep interest rates on hold. ICICI Bank, Axis Bank, HDFC Bank and State Bank of India. Stocks from
rate sensitives sectors like real estate and automobiles also lost ground.

All eyes are now focused on the Union Budget 2012, to be presented by Finance Minister, Pranab Mukherjee tomorrow. Any populist measures may not go down well with the markets since the fiscal deficit is already running high.


Read more about: sensex, union budget, nifty
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