Headlines
Sensex closes flat as RBI maintains policy rates
Mumbai, April 7
A benchmark index of Indian
equities markets, the 30-scrip BSE Sensitive Index (Sensex), closed
Tuesday's trade flat -- up 12 points or 0.04 percent.
The Sensex
recovered after falling 230 points in the wake of the Reserve Bank of
India (RBI) deciding to maintain its policy rates unchanged in its first
monetary review for the 2015-16 fiscal.
The wider 50-scrip Nifty
of the National Stock Exchange (NSE) also ended the day's trade flat.
It closed 0.40 points up at 8,660.30 points.
The Sensex of the
S&P Bombay Stock Exchange (BSE), which opened at 28,582.33 points,
closed the day's trade at 28,516.59 points -- up 12.13 points or 0.04
percent from the previous day's close at 28,504.46 points.
The Sensex touched a high of 28,641.08 points and a low of 28,274.36 points in the intra-day trade.
RBI
Governor Raghuram Rajan, who conducted the first bi-monthly review of
the monetary policy for the current fiscal year, decided to retain the
repurchase rate, the reverse repurchase rate, the cash reserve ratio and
the statutory ratio at existing levels.
He also projected a 7.8
percent growth for the current fiscal year, subject to a normal monsoon
-- over which the RBI was worried -- as also an inflation rate of 5.8
percent by the end of the year, after easing to around 4 percent by
August.
Rajan said the Reserve Bank adopted an accommodative
policy stance since January, ensuring comfortable liquidity in the
system. "Going forward, the accommodative stance of monetary policy will
be maintained, but monetary policy actions will be conditioned by
incoming data."
Accordingly, the repurchase rate and reserve
repurchase rate have been maintained at 7.5 percent and 6.5 percent,
respectively, while the cash reserve ratio and the statutory liquidity
ratio have been left untouched at 4 percent and 21.5 percent,
respectively.
Charting Tuesday's trade, an analyst said the
Indian markets opened on a positive note by tracking global cues.
However, they slipped into the negative territory after the RBI policy
meet, but later recovered due to selective buying.
"As
expected, RBI has maintained its status quo. RBI is interested seeing
banks to start sharing benefit of 50 basis points cut in repo rate
earlier," said Vinod Nair, head - Fundamental Research, Geojit BNP
Paribas Financial Services.
According to Nair, RBI rate cut will depend on forthcoming data, US fed decision and improvement of business environment.
"Hence,
as per the first requirement, fourth quarter performance of banks will
be very important in terms of NPAs (non-performing assets)
restructuring. Post which we can expect banks to lower the lending
rate," Nair added.
Healthy buying took place in metal, capital
goods, consumer durables, fast moving consumer goods (FMCG) and
information technology (IT) sectors. However, banks, healthcare and
realty stocks came under intense selling pressure.
However, metal
index gained 208.74 points, capital goods index augmented by 80.18
points, consumer durables index increased by 70.67 points, FMCG index
rose 51.83 points and IT index was up 36.18 points.
The S&P
BSE bank index shed 151.84 points, healthcare index declined by 34.68
points and realty index was lower by 29.74 points.
The major
Sensex gainers on Tuesday were: Tata Steel, up 4.89 percent at
Rs.333.60; Sesa Sterlite, up 3.14 percent at Rs.197.35; Bajaj Auto, up
3.03 percent at Rs.2,093; NTPC, up 2.73 percent at Rs.156; and Bharti
Airtel, up 2.03 percent at Rs.409.15.
The losers were: Axis Bank,
down 1.69 percent at Rs.558.90; Sun Pharma, down 1.42 percent at
Rs.1,151.95; Tata Motors, down 1.32 percent at Rs.560.05; ICICI Bank,
down 1.20 percent at Rs.317.45; and Hero MotoCorp, down 1.19 percent at
Rs.2,640.
Among the Asian markets, Japan's Nikkei went up by 1.25
percent while Hong Kong's Hang Seng closed higher by 0.77 percent.
China's Shanghai Composite Index gained by 2.51 percent.
In
Europe, London's FTSE 100 was up by 1.38 percent and France's CAC 40 was
higher by 1.29 percent. However, Germany's DAX Index was down 0.93
percent at the closing in the Indian markets.