A benchmark index of Indian equities markets closed on Monday’s trade nearly two percent down on sustained selling in rate-sensitive shares.
A benchmark index of Indian equities markets closed on Monday’s trade nearly two percent or 363 points down on sustained selling in rate-sensitive shares like bank, realty, autos and capital goods.
The bearish sentiment in the market followed a surprise rate hike on Friday by the Reserve Bank of India.
The 30-scrip S&P Sensex of the Bombay Stock Exchange (BSE), which opened at 20,060.82 points, closed at 19,900.96 points, down 362.75 points or 1.79 percent from its previous day’s close at 20,263.71 points.
The benchmark Sensex surged to a high of 20,199.81 points and a low of 19,826.30 points in the day’s trade.
The wider 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) also slid 122.35 points or 2.04 percent at 5,889.75 points.
RBI on Sep 20 increased the repurchase or repo rate by 0.25 percent to 7.5 percent. Repo rate is what commercial banks pay when they borrow short-term money from the RBI.
The reverse repo rate, or the interest rate that RBI pays to the commercial banks on their short-term deposits, is adjusted to 6.5 percent from the earlier 6.25 percent.
The RBI move will make home, auto and other loans costlier and worsen the industrial and overall growth situation which is already sluggish.
Sector-wise bank, capital goods, oil and gas, automobile and fast moving consumer goods (FMCG) stocks sustained heavy losses. However, consumer durables, information technology, technology, entertainment and media (TECk) stocks gained.
The S&P BSE bank index lost 536.29 points, capital goods index was down 264.36 points, followed by oil and gas index by 155.78 points, public sector undertakings (PSU) index was down 145.82 points and automobile index was down 130.38 points.
Healthy buying took place in consumer durables stocks. The consumer durables index increased by 137.20 points, followed by IT index which was up 71.34 points and TECk index which was up 19.30 points.
The prominent Sensex gainers were: Sesa Goa, up 3.14 percent at Rs.183.95; Hindalco Inds, up 1.84 percent at Rs.116.35; Wipro, up 1.75 percent at Rs.483.60; Coal India, up 1.20 percent at Rs.304.75 and DrReddys Lab, up 1.06 percent at Rs.2,394.
The losers were: State Bank of India (SBI), down 5.39 percent at Rs.1,652.45; ONGC, down 4.86 percent at Rs.276.25; ICICI Bank, down 4.39 percent at Rs.944; Maruti Suzuki, down 4.37 percent at Rs.1,402.05; and Larsen and Toubro (L&T), down 4.20 percent at Rs.811.45.
Among the Asian markets, Japan’s Nikkei closed 0.16 percent down and Hong Kong’s Hang Seng lost by 0.56 percent while China’s Shanghai Composite Index was higher by 1.33 percent.
In Europe, London’s FTSE 100 was trading 0.38 percent down and Germany’s DAX Index was down 0.12 percent while the French CAC 40 Index was up by 0.01 percent.