India : Sensex off day’s high, Nifty fails to hold 8150; RBI policy eyed
Tue Dec 06 2016
Rajesh Sharma (2002 articles)

India : Sensex off day’s high, Nifty fails to hold 8150; RBI policy eyed

The NSE Nifty ended Tuesday’s session on a positive note but failed to hold 8150 level due to late sell-off in private banking & financials and auto stocks. Investors remained cautious ahead of the outcome of monetary policy committee meeting tomorrow.The 30-share BSE Sensex was up 43.66 points at 26392.76, and the 50-share NSE Nifty gained 14.40 points at 8143.15 after hitting an intraday high of Rs 8178.70 while the broader markets outperformed.

The recent recovery in the market after falling below 8000 level indicated that a 25 basis points cut in repo rate is largely priced in. Now all eyes are on commentary of the Reserve Bank of India, analysts say, adding the upside may continue if RBI cuts repo rate by 50 basis points on December 7.

“Markets would now be eyeing RBI’s GVA guidance, as it could give more insight into RBI’s conviction about growth,” Anand James of Geojit BNP Paribas says.

Jayant Manglik of Religare Securities says, “Continuous underperformance from banking pack is keeping the uncertainty intact and we feel it’ll finally be over on Wednesday i.e. December 7, with the announcement of Monetary Policy Committee’s decision on key rates.”

He suggests staying light before the event, considering the possibility of erratic market swings.

The BSE Midcap and Smallcap indices rose half a percent each on positive breadth. About 1523 shares advanced against 1137 declining shares on the bourses.

Meanwhile, the rupee strengthened further, gaining past 68 against the US dollar. It was trading at 67.94 a dollar, up 27 paise at the time of writing this article.

Nifty Bank ended flat after rising half a percent intraday. State Bank of India gained 1 percent and ICICI Bank was up 0.17 percent while HDFC Bank fell 0.2 percent and Axis Bank declined 1 percent.

Auto index also lost gains as Maruti Suzuki, Bajaj Auto, Hero Motocorp and Mahindra & Mahindra fell 0.3-1.2 percent. Tata Motors was up 0.4 percent despite target price cut by CLSA and weak JLR’s UK sales in November.

HDFC recouped previous day’s losses, up 2 percent that might be an indication of delivery buying from FIIs.

Among others, Reliance Industries, ONGC, Adani Ports and Tata Steel gained 1 percent each whereas ITC, HUL and Sun Pharma declined 1 percent each.

European stocks were flat as concerns over political instability ease and investors focus on the upcoming meeting of the European Central Bank. Asian markets bounced back today with the central bank in Australia holding its benchmark rate steady and as market uncertainty faded following the failed referendum in Italy.

Rajesh Sharma

Rajesh Sharma

Rajesh Sharma is Correspondent for Stock Market of South East Asia based in Mumbai. He has been covering Asian markets for more than 5 years.

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