Sensex spooked by banks…Nifty slides below 5700

The Indian markets snapped a three day rally on Tuesday as banks retreated in the wake of this year’s first rate hike announced by the RBI and HUL slipped on the back of disappointing Q3 results. The markets saw strong volumes and turnover ahead of the F&O expiry on Thursday.

The benchmark stock indices slipped despite the RBI raising the repo rate and the reverse repo rate by only 25 bps and extended liquidity support till April 8. The cenra'l bank kept its fy11 GDP forecast unchanged at 8.5% while lifting the inflation projection to 7% from 5.5% earlier.



The fall was led by Banking, FMCG, Pharma and Realty stocks. Even the Mid-Cap and the Small-Cap stocks were under pressure. However, bucking the negative trend were the Consumer Durables and Capital Goods stocks which gained 1.7% ad 0.3%, respectively.

Although the rate hike by the RBI was in line with expectations and there were no nasty surprises, the markets slumped on fears that if inflation doesn’t soften in the coming weeks there may be further monetary tightening, which could then have a sobering effect on economic growth. Thursday’s session will be an important one due to the F&O expiry, says Amar Ambani, Head of Research (India Private Clients) - IIFL.

The BSE Sensex slipped 182 points to close at 18,969 and the NSE Nifty lost 56 points to end at 5,687.

Among the BSE sectoral indices, the BSE Banking index was the top loser, the index lost 2.3%, BSE FMCG was down 1.7% and BSE Pharma index was down 1.3%. The BSE Mid-Cap index lost 0.4% and BSE Small-Cap index 0.3%.

On the other hand, BSE Consumer Durables index edged higher by 1.7% followed by BSE Capital Goods index marginally gained 0.3%.

Outside the frontline indices, the big losers in the broader market were JP Infra, LITL, PFC and TVS Motors. On the other hand, gainers included Motherson Sumi, IRB Infra, Idea and Fin tech.

NTPC, Hero Honda, Hindalco Inds, Tata Steel, Bharti Airtel, BHEL, L&T, Wipro, Tata Power, Sterlite Inds, HDFC, GAIL and Siemens are leading in the Sensex and Nifty.

Hindustan Uniliver, ICICI Bank, HDFC Bank, M&M, Tata Motors, Relianc Infra, Jindal Steel, Jaiprakash Asso, RCOM, RIL, TCS, Cipla, Bajaj Auto, Infosys, DLF, ITC, ONGC, SBI, Maruti Suzuki and Suzlon are the notable losers in the Sensex and Nifty