Sensex slips 115 pts in volatile trade after RBI holds rates
Markets fell for the second day with benchmark Sensex declining over 115 points on Tuesday on selling in auto stocks after RBI kept interest rates unchanged for the fifth time in a row and IT shares dipped on strength in rupee.business Updated: Dec 02, 2014 17:28 IST
Markets fell for the second day with benchmark Sensex declining over 115 points on Tuesday on selling in auto stocks after RBI kept interest rates unchanged for the fifth time in a row and IT shares dipped on strength in rupee.
In highly volatile trade, the 30-share BSE index fell to touch the day's low of 28,386.46 following announcement of credit policy. However, the index recovered briefly to hit 28,576.39 on RBI Governor Raghuram Rajan's hint of lowering rates early next year.
Participants later resorted to selling at every rise and the Sensex ended the day at 28,444.01, down 115.61 points, or 0.40%. On Monday, it had slipped 134.37 points.
On similar lines, the NSE 50-share Nifty, after swinging to and fro, settled with a loss of 31.20 points, or 0.36%, at 8,524.70. Intra-day, it traded in a narrow range between 8,504.65 and 8,560.20.
"By not cutting rates, RBI has remained consistent in their policy objective of decisively bringing down inflation -and long term inflationary expectations. Lower post policy bond yields show the market feels more confident that eventually rates will be much lower," said Arvind Sethi, MD & CEO, TATA Asset Management.
Rupee, which had breached 62-mark against dollar in previous sessions on Tuesday strengthened to 61.87 levels. This put pressure of shares IT companies, including TCS and Infosys, which earn most of their sales in the US currency.
Oil scrips also were on the sellers' list after excise duty on petrol was hiked by Rs 2.25 per litre and by Re 1 a litre on diesel but retail pump rates won't rise as oil firms have decided to absorb the duty change for the time being.
Over half of the 30 Sensex constituents ended with losses led by GAIL (down 2.85%), M and M (2.47%), HDFC (1.51%) and Hero MotoCorp (1.48%).
Sectorwise, BSE IT index suffered the most by losing 1.48%, followed by Auto 1.05% and Oil and Gas 0.66%, among others.
Global cues, however, were conducive as Asian bourses ended higher and Europe was better in its opening trades.
Meanwhile, Foreign Portfolio Investors sold shares worth net Rs 12.36 crore on Monday, as per provisional data.