Market Investors Book Profit on RBI Policy Stance, Global Cues

Mumbai: Market continued to be volatile as Sensex and Nifty-50 fell on Thursday by 0.7 per cent each. Rate-sensitive sectors reality, consumer durable, capital goods and auto fell as RBI maintained status quo on interest rate while banks closed mixed.

The Sensex fell 581.79 points or 0.73 per cent closing at 78,886.22 while Nifty-50 index fell 0.74 per cent or 180.50 points closing at 24,117. Broader market outperformed with BSE Mid-cap index down by 0.44 per cent and the BSE Small-cap index down by 0.16 per cent.

Global cues dominated market movement as there was bigger fall in BSE IT index(-1.82 per cent), Metal(-2.02 per cent) and Oil& Gas(-1.46 per cent), the rate sensitive sectors that fell included BSE Realty(-1.22 per cent), Consumer Durable(-1.17 per cent), Capital Goods(-0.89 per cent), and Auto(-0.34 per cent). Nifty Bank index gained 0.08 per cent while BSE Bankex gained 0.07 per cent. Bank stocks were mixed, Nifty PSU Banks index fell 0.78 per cent, and the top losers included Indian Bank(-2.55 per cent), PNB(-1.66 per cent), Uco Bank(-1.35 per cent), Union Bank(-1.13 per cent) and Bank of Baroda(-1.07 per cent).

"The domestic market reversed its earlier gains as the RBI's decision to hold its current policy with a caution to revise upward the CPI and moderate the growth forecast for Q1. Meanwhile, the global market is focusing on US job data and the probability for deeper slowdown has raised concerns that the US economy is heading for a recession, forcing the Federal Reserve to cut rates faster than initially expected," said Vinod Nair, head of research, Geojit Financial Services.

Foreign portfolio investors were net sellers of equities worth Rs 2,626.73 crore while the domestic institutions were net buyers by Rs 577.30 crore.

“There is a lot of uncertainty in global markets with regards to fears of a recession in the US and the rising tension in the Middle East, which is prompting investors to cut down their long bullish bets in local equities as well. Also, the hawkish stance by RBI on its interest rate decision allowed investors to trim their exposure," said Prashanth Tapse, senior VP-Research, at Mehta Equities.