RBI’s move in sync; Markets end flat

Major headlines

Reserve Bank of India raises repo, reverse repo rate by 25 bps

Bajaj Auto sales up 31% in October; the stock ends 1.07% up

ABG Shipyard bags export order; the stock closes 0.45% higher



Indian indices

The domestic indices failed to carry the previous session’s strong rally and ended the rangebound session on a flat note. The indices remained muted to the Reserve Bank of India (RBI)’s policy announcement, as the rate hike was very much on expected lines. The RBI hiked repo rate (rate at which banks borrow from RBI) by 25 basis points from 6% to 6.25% and reverse repo rate (rate at which RBI borrows from banks) by 25 basis points from 5% to 5.25%. The cash reserve ratio (CRR) was left untouched at 6%. BSE Mid-cap and BSE Small-cap indices outperformed the Sensex.

Realty stocks were the worst hit after the RBI tightened norms for home loans. DLF and Unitech tumbled by 3% each. Ackruti City, Anant Raj Industries, DB Realty, Indiabulls Real Estate, Phoenix Mills and Sobha Developers fell in the range of 2-4%. In the Mid-cap space, Wockhardt, AIA Engineering, Karnataka Bank, SpiceJet and BASF went up between 5-18% while Usha Martin, S Kumars Nationwide, Hindustan National Glass and IndusInd Bank fell in the range 2.8-4%.

The Sensex began the session 52 points higher at 20407. The index soon turned negative and remained in the red for most part of the morning session ignoring rate hike by the RBI. Going into afternoon trades, the index started to rise, hitting the day’s high of 20418 with the support of the positive European markets. From the high level, the index again slipped in the red to hit the day’s low of 20282. In late trades, the Sensex turned volatile and ended the session on a flat note.

At closing bell, the Sensex shut ten points lower at 20346. The Nifty closed at 6119, higher by mere one point.

Rupee update: The Indian rupee opened at 44.46 per dollar versus 44.47.

Market sentiment

The market breadth was unconstructive as declining stocks outdid the rising ones. On the BSE, out of the 3,101 stocks, 1,597 fell while 1,385 rose. Hundred and nineteen stocks traded unchanged.

Sectoral and stock screening

Out of 13 sectoral indices, nine sectors ended in the green while four closed in the red. BSC Consumer Durables (CD) was the top gainer, up by 1.64%, followed by BSE Capital Goods (CG) by that gained by 1.42% and BSE Information Technology (IT) advanced by 0.62%. On the flip side, BSE Realty lost the most by 2.58%, followed by BSE Oil & Gas that dipped by 0.80% and BSE Auto declined by 0.53%.

In 'A' group stocks, the toppers were - Great Eastern Shipping (up 11.17%), Rashtriya Chemicals (8.76% higher) and Torrent Power (up 6.25%). The losers were - Indiabulls Real Estate (down 5.03%), Unitech (3.31% lower) and DLF (slipped 3.28%).

Viewing volumes

Industrial finance company - IFCI was the most traded, with over 0.40 crore shares changing hands on the BSE, followed by Indian shipbuilder - Pipavav shipyard (0.32 crore shares), Jaiprakash Associates (0.28 crore shares), Mahanagar Telephone Nigam (0.28 crore shares) and Essar Group firm - Essar Oil (0.27 crore shares).

Global signals

European stocks rose, as oil major gains after upbeat underlying results from British Petroleum and BG Group.

All the major Asian indices closed in the positive zone except Shanghai Composite and Jakarta Composite.

The US stock index futures point to a marginally higher opening on the Wall Street ahead of the crucial Federal reserves meeting.

Market Outlook: Tonight in the US, we have a big event like Federal Reserves meet.