Sensex falls below 20,000 on RBI lowering growth

Mumbai  : A benchmark index for Indian equities markets pared gains to close 112 points or over half a percent down on profit booking in Tuesday’s trade after the Reserve Bank of India (RBI) lowered its growth projection for the economy.

After opening in the negative zone, the markets moved up once the central bank announced a 25 basis pint cut both in repo rate and the cash reserve ratio.

Read Also  : India’s central bank cuts key rates, releases more money

However, in late afternoon trade stocks came under selling pressure. Traders and analysts said the markets had priced in the 25 basis point cut and RBI’s growth projection dampened the otherwise bullish sentiment.

The RBI expects the gross domestic product (GDP) growth at 5.5 percent in the current financial year as new investment demand continues to remain muted. It made further rate cuts conditional on the government move to control fiscal deficit.

There was heavy selling in oil and gas, automobile, banking, public sector undertakings (PSU) and metal stocks. Fast moving consumer goods (FMCG), however, stocks did well.

The 30-share Sensex, which opened at 20,080.31 points, closed at 19,990.90 points, down 112.45 points or 0.56 percent from its previous close at 20,103.35 points.

The Sensex touched an intra-day high of 20,203.66 points and a low of 19,970.05 points.

The midcap index was down 39.91 points, while the smallcap index was lower by 65.11 points.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) closed lower at 24.90 points or 0.41 percent at 6,049.90 points.

Major indices were down — the oil and gas index was down 127.40 points; automobile index, down 125.47 points; bank index was lower by 74.19 points; followed by the PSU index, down 53.10 points; and the metal index, down 51.63 points.

FMCG index gained 41.19 points.

The Sensex gainers were ITC, up 1.73 percent at Rs.305.60; Coal India, up 1.62 percent at Rs.347.60; ICICI Bank, up 0.87 percent at Rs.1,200.90; Hero MotoCorp, up 0.76 percent at Rs.1,810.25; and HDFC, up 0.52 percent at Rs.806.00.

The main losers were Hindalco Inds, down 2.70 percent at Rs.115.20; Bajaj Auto, down 2.62 percent at Rs.2,031.75; HDFC Bank, down 2.61 percent at Rs.652.50; Bharti Airtel, down 2.43 percent at Rs.348.90; and BHEL, down 2.12 percent at Rs.223.70.

Among other Asian markets, Japan’s Nikkei was up 0.39 percent, while Hong Kong’s Hang Seng was down 0.07 percent. China’s Shanghai Composite Index was trading higher by 0.53 percent.

In Europe, Britain’s FTSE 100 was down 0.12 percent, while the German DAX was trading 0.24 percent lower. The French CAC 40 was down 0.42 percent.

Read Also  : India’s central bank cuts key rates, releases more money

Photo  :  AFP