Post Session: Bears grip D-Street; Sensex tumbles 150 points Analysis for Sep 15, 2015

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Indian market ended the day with deep cuts amid weak global cues, coupled with profit booking in financial shares that gained in the previous session on rate cut hopes by the RBI amid easing consumer price inflation for August.

The 30-share BSE SENSEX closed at 25705.93 down by 150.77 points or by 0.58 per cent, while the NSE Nifty was at 7829.1, down by 43.15 points or by 0.55 per cent.

Traders maintained cautious stance ahead of the key two-day policy meet of the US Federal Reserve beginning Wednesday in which the world"s top central bank will decide whether the time is right to exit from its zero interest rate policy and raise interest rates for the first time since 2006.

Meanwhile, bets that the Reserve Bank of India (RBI) may cut interest rates on September 29, following Monday"s wholesale and consumer price inflation numbers which signaled weakening price pressures in Asia"s third biggest economy, failed to support Dalal Street as investors preferred profit-taking despite positive macro economic data released yesterday .

Traders overlooked the Consumer price inflation (CPI) data announced late yesterday that showed the retail inflation easing to 3.66 per cent in August from 3.69 per cent in July 2015. There was some concern with food inflation inching up to 2.2 percent in August from 2.15 in the previous month that may lead RBI to think again before going for its fourth rate cut.

The BSE Sensex touched an intraday high of 25909.83 and an intraday low of 25649.37, while the NSE Nifty touched an intraday high of 7880 and an intraday low of 7799.75.

Major show spoilers on the D-street included Tata Steel Ltd. (Rs. 229.05,-5.08%), Vedanta Ltd. (Rs. 96.90,-4.06%), Tata Motors Ltd. (Rs. 333.95,-3.69%), Hindalco Industries Ltd. (Rs. 76.30,-3.05%), Larsen & Toubro Ltd. (Rs. 1556.95,-2.92%), among others.

Among the sectors, metal index slid the most by 2.34 per cent, feeling the heat from a worsening China slowdown with country"s factory growth in August coming in below estimates while investment expansion hitting a 15-year low in the first eight months of 2015. China is the world"s biggest metals consumer.

The Market breadth, indicating the overall strength of the market, was weak. On BSE out of total 2702 shares traded, 1105 shares advanced, 1508 shares declined while 89 remained unchanged.

On the global front, Asian stocks ended mixed ahead of the FOMC meet beginning tomorrow with most traders anticipating the Fed to refrain from an increase in US borrowing costs this week amidst the ongoing global financial market turmoil, even as odds for a rate hike before the end of 2015 remain quite high. However, the Japanese market posted gains of around a per cent despite the Bank of Japan (BOJ) refraining from boosting stimulus even after the economy shrank last quarter.

Story first published: Tuesday, September 15, 2015, 17:00 [IST]
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