First big fall of June on RBI policy day; Sensex dips 244 pts

The Indian markets undermined after the RBI left key rates unchanged and ended the session on a negative note. The Sensex fell by 244 points while the Nifty was down by 75 points. Major Headlines of the day: RBI leaves key rates unchanged India’s May CPI inflation remains unchanged at 10.36% SBI will raise up to $2 bln in next 3 months Inflation weighed on RBI’s mind: FM RBI does the delicate balancing act again; Road ahead? Indian Indices: The Indian markets had an action packed trading as it opened today's session with 1% gains following strong Asian cues led by favorable outcome from Greek elections and on expectations of RBI policy meet. Further, in the mid morning session, after the release of RBI mid quarter monetary policy, the key benchmarked indices declined as RBI shocked the markets by keeping both the repo rate and the cash reserve ratio ( CRR) unchanged. The markets took a 'U' turn and flooded downward towards the red zone, which led the markets to close negative. The BSE Sensex and the NSE Nifty fell over 1% each. The broader indices were also in red zone resulting towards a weak market breadth. Major Index heavyweight draggers were - HDFC Bank, ICICI Bank, ITC, SBI, RIL, HDFC and Infy. All-round selling across the board also led the markets to trade with heavy losses. All the sectors closed in the red zone except consumer durables. The BSE Midcap index fell by 1.06% and the BSE Smallcap index lost 0.64% at the end of the day. The Sensex closed at 16705.83, down by 244 points and the Nifty fell 74.80 points to close at 5064.25. Major Economic news, which affected markets in trade today: Looking towards major Events, Reserve Bank of India (RBI) kept its policy repo rate unchanged at 8% and left the cash reserve ratio for banks at 4.75%. Export credit refinance facility will be raised to 50% from June 30. Further the RBI will continue to use open market operations (OMOs) whenever required to curb liquidity pressures. Taking a snap short of Inflation, in today's statement, Government said that India's annual consumer price inflation (CPI) remained unchanged for May at 10.36%. Tracking today stocks specific actions, Tinplate Company and Tata Sponge Iron surged on back of huge volumes in opening deals after their promoter, Tata Steel, proposed to hike its stake in group firms by up to 14% and 11.26% for a total consideration of Rs153 crore. At end of the day the Tinplate Company closed 18.91% higher and Tata Sponge Iron closed 12.66% higher. HCL Technologies declined on reports that information technology consulting and software provider is heading for a major management reshuffle as some senior executives close to CEO Vineet Nayar are quitting along with Nayar. The stock closed 3.71% lower. Aviation companies like Kingfisher Airlines, Jet Airways and SpiceJet rallied after 5% cut in aviation turbine fuel prices in Delhi. At end of the market hours Kingfisher Airlines was down by 2.70%, Jet Airways was down by 0.95% and SpiceJet was down by 3.23% On the sectoral front, rate sensitive banking stocks tumbled deeply after the Reserve Bank of India (RBI) kept key policy rates and cash reserve ratio unchanged in its mid-quarter monetary policy review today (June 18, 2012). At end of the trading session SBI fell by 4.36%, ICICI Bank fell by 3.34%, HDFC Bank fell by 2.71%, IDBI fell by 4.68%, BOB fell by 3.53% and PNB fell by 4.04%. After the markets closed today, Fitch revised the India outlook to negative and affirmed rating at 'BBB-' which can have a huge impact in tomorrows trading session. Market sentiment: The market breadth stood in favor of declines. Of the total 2,808 stocks traded on the BSE, 1,001 advanced, 1,688 declined and 119 remained unchanged. Sectoral & stock screening: Among the 13 sectoral indices, twelve sectors closed in red zone, and only one sector closed in green zone that is BSE CD (up by 0.16%). Top Losers: BSE Bankex (fell by 3.16%), BSE Realty (down by 2.78%), BSE FMCG (declined by 1.68%). Of the remaining 9 sectoral indices, five ended with losses over 1% each. Among 'A' group stocks, top gainers were- NALCO (rose by 3.36%), Motherson Sumi (surged by 0.1.80%) and Strides Arcolab (gained by 1.80%). Top losers were- Adani Enterprises (declined by 6.39%), IRB Infra (dropped by 5.58%) and UCO Bank (fell by 5.14%) Global signals: Asian markets gained momentum as Japan's Nikkei share average topped 8,700 for the first time in a month on Monday after Greece's pro-bailout parties won a parliamentary majority at weekend elections, easing fears of a messy euro zone exit. European indices saw mixed opening today as initial euphoria over a slim victory for Greece's pro-bailout parties faded and the focus returned to the euro zone's problems and the chances of any action by central banks. US stock index futures pointed towards a higher opening at the Wall Street on Monday. Market Outlook: Data to be released in the US on Monday: Housing Market Index