RBI Credit Policy: Sensex ends 160 pts lower; rate sensitives fall, metals up

Investors seem to be on selling mode today as the Nifty slipped closer to 5950 led by rate sensitives. The Reserve Bank of India delivered its policy in line with street estimates. It has slashed the repo rate by 25 basis points to 7.25 percent and left cash reserve ratio (CRR) unchanged at 4 percent. However, the tone was hawkish and the central bank warned there is 'little space' for further monetary easing.

The Nifty fell 55.35 points to close at 5944 while the Sensex was down 160 points to end at 19575.64.

The Bank Nifty lost 2.5 percent while BSE Bankex was down 2.4 percent. Other rate sensitives like BSE Realty index (down 1.4 percent), BSE Auto (down 1.5 percent) too lost investors' confidence.

However, metals, technology and capital goods stocks were on buyers' radar.

The midcap index (down 0.3 percent) saw smaller cuts as Canara Bank, Allahabad Bank And Karnataka Bank were down 3-4% each. GMR Infra fell 2.1 percent while HDIL was down 1.2 percent.

Tata Motors (down 3.8 percent), SBI (down 3.6 percent), ICICI Bank, GAIL and Bajaj Auto were the major losers in the Sensex.

Meanwhile, Jindal Steel, Hindalco, Tata Steel, Sun Pharma and Sterlite were the top gainers of the day.

Key equity benchmarks were trading volatile after RBI's credit policy announcement. The central bank left the cash reserve ratio unchanged at 4 percent and slashed the repo rate by 25 basis points to 7.25 percent.

The Nifty was down 50 points within minutes of policy announcement. However, it recovered all the losses in the early noon trade. The selling activity further picked up around 6000 levels and the Nifty was further down 1 percent demonstrating the volatile nature of the market. Bank Nifty, the barometer of banking stocks was down 2 percent. Rate sensitives were taking a beating in the last one hour of trade on profit booking.

The Sensex was down 127 points or 0.64% at 19608, and the Nifty was down 44 points or 0.74% at 5955. About 930 shares advanced, 1244 shares declined, and 142 shares remained unchanged.

Key gainers in the Nifty were Jindal Steel, HCL Tech, Tata Steel, Sesa Goa and Hindalco.

Laggards included Tata Motors, SBI, BPCL, PNB and ICICI Bank, down between 3-4 percent.

Ambuja Cements disappointed the street with its first quarter earnings both on the topline and bottomline front. The company reported net income of Rs 488 crore and sales of Rs 2545 crore, way below estimates. The stock was down 1 percent.

JSW Energy reported 49 percent year-on-year growth in March quarter profit to Rs 336 crore boosted by higher tariff at Barmer plant and lower interest costs.

Indian shares recovered most of the losses it made the entire morning after the Reserve Bank of India (RBI) cut repo rate by 25 basis points to 7.25 percent. The central bank left the cash reserve ratio unchanged at 4 percent.

The Sensex was down 73 points or 0.37% at 19662 and the Nifty was down 23 points or 0.39% at 5976. About 928 shares advanced, 1130 shares declined and 132 shares remained unchanged.

Bank stocks were under pressure as the RBI has projected a dire outlook on economic activity and business confidence. A slow paced recovery could further compound the problem of bad loans for the banking sector. Bank Nifty was down 1 percent, recovered more than half of its losses.

Key laggards in the Bank Nifty were HDFC Bank, SBI, ICICI Bank, HDFC and Axis Bank, down between 1-2 percent.

Metal stocks were trading firm after reports of India considering emergency tariffs on some iron and steel pipes, tubes and profiles to protect its domestic industry from imports, primarily from China and Italy, said Reuters note.

Top four gainers in the Sensex were metal stocks. Shares of Jindal Steel, Sterlite Industries, Hindalco and Tata Steel were up between 1 to 2 percent.

IT stocks were trading firm on the back of short covering. Shares of IT firms were down over 10 percent in the April month. HCL Tech and Infosys were up over 1 percent each.

Realty index or popularly known as rate sensitive sector was also trading sluggish.

Key equity benchmarks recovered from day's low after the Reserve Bank of India (RBI) had slashed repo rate by 25 basis points to 7.25 percent. RBI left cash reserve ratio (CRR) unchanged at 4 percent. The Sensex lost 140 points after the policy announcement but within minutes it recovered from day's low. Bank Nifty also recouped losses and was down less than a percent. Rate sensitive sectors like auto and realty indices were down between 0.5-1 percent.

The Sensex was down 74 points or 0.38% at 19661 and the Nifty was down 26 points or 0.44% at 5972. The breadth of the market was negative. About 797 shares advanced, 1098 shares declined, and 121 shares remain unchanged.

Key gainers in the Nifty were HCL Tech, Ambuja Cements, Jindal Steel, Reliance Industries and Lupin, up between 1.5-2.5 percent.

Laggards included PNB, SBI, IDFC, BPCL and Bajaj Auto, down between 1.7-2.7 percent.

Top losers in the Bank Nifty were Canara Bank, Punjab National Bank and SBI down over 2 percent each.

The 10-year bond yield shot up by 1 percent to 7.7874 post RBI policy announcement.

Key takeaways from RBI's credit policy
RBI forecasts FY14 GDP growth (2013-14) at 5.7 percent, as it expects only a modest improvement in economic activity this year. The central bank also said that it would attempt to limit inflation to 5 percent this year, "using all instruments at its command."

The tone of the statement shows keeping inflation in check would be a priority for RBI, over reviving growth.

RBI said it had "little space" for cutting interest rates as it tries to maintain a balance between growth and inflation.

"The outlook for industrial activity remains subdued, with the pipeline of new investment drying up and existing projects stalled by bottlenecks and mplementation gaps. With global growth unlikely to improve significantly from 2012, growth in services and exports may remain sluggish," the RBI said.

The market continued its southward journey just as the Reserve Bank of India slashed repo rate by 25 basis points (bps) in its monetary policy review. The central bank has left cash reserve ratio (CRR) unchanged. The RBI has also mentioned 'little space for further monetary easing'.

The market had already factored in a 25 bps repo cut. The Sensex was down 167.23 points at 19568.54 and the Nifty fell 56 points to 5943.35. The Bank Nifty fell 1.8 percent reacting negatively to the RBI's stance. The BSE Bankex (down 1.7 percent) and other rate sensitives BSE Realty (down 1.7 percent) and BSE Auto (down 1.5 percent) too followed.

SBI, ICICI Bank, Tata Motors, Bajaj Auto and HDFC were the biggest losers in the Sensex.

Meanwhile, Bharti Airtel (up 1.4 percent) maintained its upmove. NTPC, Infosys, Wipro and Jindal Steel were the big gainers of the day.

Key equity benchmarks fell 0.4 percent after the Reserve Bank of India (RBI) continued to maintain its hawkish tone in its macro-economic report ahead of today's credit policy. The central bank warned of a very limited scope for further loosening of monetary policy in FY14.

The Sensex was down 63 points at 19672.76, and the Nifty was down 22 points at 5977.20. The breadth of the market was neutral. About 851 shares advanced, 805 shares declined, and 113 shares remain unchanged.

A complete 100 percent respondents of the old CNBC-TV18 poll were expecting a 25 basis points (bps) repo cut but only 20 percent expect a cash reserve ratio (CRR) cut. However, given the fall in commodity prices in the past two weeks, market watchers have become more dovish in their expectations.

The Bank Nifty was trading at 12575, down 1 percent. Banking heavyweights like SBI, ICICI Bank, IndusInd Bank and Axis Bank were down between 1-2 percent.

Shares in Bharti Airtel surged 4 percent in morning trade on Friday after the company announced to sell a 5 percent stake to Qatar Foundation Endowment for USD 1.26 billion.

Key gainers in the Nifty were Bharti Airtel, HCL Tech, Lupin, NTPC and Ambuja Cements, up over 1 percent each.

Laggards included Jaiprakash Associates, Tata Motors, SBI, IDFC and IndusInd Bank, down between 2-2.5 percent.

The Indian rupee falls to 54.02/03 versus its close of 53.81/82 on Thursday, following hawkish comments by the Reserve Bank of India in its macro-report released late on Thursday.

The market seemed to have tapered down expectations from the Reserve Bank of India's monetary policy review today. The central bank continued to be cautious about the state of the economy. In its macro-economic report ahead of credit policy review, the central bank has maintained that monetary space is limited this fiscal.

The Sensex was down 65.30 points at 19670.47 while the Nifty fell 16.45 points at 5982.90.

Rate sensitive stocks like banking, autos and realty looked weak in the initial trading session.

HDFC, ICICI Bank, Hero MotoCorp, M&M and SBI were the big losers in the Sensex.

Recovering Thursday's losses, Bharti Airtel was the big star of the day. The stock gained 2.5 percent as the telecom operator entered into a long-term strategic investment from Qatar Foundation endowment. Qatar Foundation to buy 5 percent stake in the company at Rs 340 per share.

Cement majors ACC (up 1.2 percent), Ambuja Cements (up 1.2 percent), Heidelberg Cement (up 0.1 percent) are likely to be in focus today ahead of announcement of January-March quarter earnings.

Gujarat Pipavav Port rose 9.2 percent on the back of strong January-March quarter earnings. Its net profit grew to Rs 35.4 crore from Rs 14.1 crore year-on-year.

Sterlite Industries, Tata Steel, Jindal Steel and Dr Reddy's Lab were major gainers in the Sensex.