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Mid-Session: D-Street gives thumbs down to RBI status quo; rate sensitive stocks tumble Analysis for Apr 07, 2015

By Religare

Triggered by the RBI policy stance, the Indian benchmarks slipped in the negative terrain in the afternoon session of the day"s trade, led by losses in rate sensitive realty and financial stocks. In line with expectations, the Reserve Bank of India kept key rates unchanged and maintained status quo in its first bi-monthly monetary policy review for 2015-16. The apex bank kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.5 per cent and the cash reserve ratio (CRR) at 4.0 per cent. Consequently, the reverse repo rate under the LAF will remain unchanged at 6.5 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.5 per cent.


At 12:25 PM BSE SENSEX was at 28334.84 down by 169.62 points or by 0.6 per cent and then NSE Nifty was at 8623.5 down by 36.4 points or by 0.42 per cent.

“Transmission of policy rates to lending rates has not taken place so far despite weak credit off take and the front loading of two rate cuts. With little transmission, and the possibility that incoming data will provide more clarity on the balance of risks on inflation, the Reserve Bank will maintain status quo in its monetary policy stance in this review," RBI Governor Raghuram Rajan said in a statement.

He further said that the accommodative stance of monetary policy will be maintained, but monetary policy actions will be conditioned by incoming data, such as inflation and US monetary policy.

Outperforming the benchmark indices, the broader market were trading higher holding its ground with the BSE MIDCAP at 10876.38 up by 6.56 points or by 0.06 per cent, while the BSE SMLCAP was at 11332.56 up by 33.26 points or by 0.29 per cent.

In the volatile trade so far, the BSE Sensex touched intraday high of 28641.08 and intraday low of 28321.10 and the NSE Nifty touched intraday high of 8693.60 and intraday low of 8613.40.

The top losers of the BSE Sensex pack were Tata Motors Ltd. (Rs. 556.55,-1.94%), Sun Pharmaceutical Industries Ltd. (Rs. 1147.00,-1.84%), Axis Bank Ltd. (Rs. 559.45,-1.59%), Hero MotoCorp Ltd. (Rs. 2629.70,-1.58%), ICICI Bank Ltd. (Rs. 316.35,-1.54%), among others.

On the flip side, Bajaj Auto Ltd. (Rs. 2088.00,+2.79%), NTPC Ltd. (Rs. 154.50,+1.75%), Sesa Sterlite Ltd. (Rs. 193.85,+1.31%), Hindalco Industries Ltd. (Rs. 135.80,+0.82%), Tata Consultancy Services Ltd. (Rs. 2562.95,+0.67%), were among top gainers on BSE.


Among the thirteen sectoral indices, realty index was top losers and was trading at 1763.86 down by 36.36 points or by 2.02 per cent. Unitech Ltd. (Rs. 17.00,-3.13%), Anant Raj Ltd. (Rs. 41.25,-3.06%), DLF Ltd. (Rs. 162.55,-2.84%), Sobha Ltd. (Rs. 396.40,-2.75%), Indiabulls Real Estate Ltd. (Rs. 70.55,-2.62%), were among top losers.

Following the realty index, BSE_Bankex index was at 21123.93 down by 234.1 points or by 1.1 per cent. Axis Bank Ltd. (Rs. 559.45,-1.59%), ICICI Bank Ltd. (Rs. 316.35,-1.54%), IndusInd Bank Ltd. (Rs. 904.05,-1.33%), State Bank of India (Rs. 271.50,-1.11%), Canara Bank (Rs. 380.70,-1.07%), were among others dragging the market.

The Market breadth, indicating the overall strength of the market, was strong. On BSE out of total shares traded 2598, shares advanced were 1297 while 1189 shares declined and 112 were unchanged.

Story first published: Tuesday, April 7, 2015, 13:00 [IST]
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