Nifty, Sensex close lower as rate-sensitive stocks extend losses a day after RBI policy
Mumbai: Stock markets moved down for the second session on Thursday as the Sensex ended with a loss of 239 points after banking, realty and auto stocks struggled owing to concerns over direction of the monetary policy.
The Reserve Bank Wednesday lowered the repo rate by 25 basis points to 6% and retained its neutral policy stance, but pegged its future action to more economic data. Interest rate sensitive stocks—banking, realty and auto—continued their slide as the policy action failed to move investors.
On a closing basis, the 30-share index traded down 238.86 points, or 0.74%, at 32,237.88 after hitting a low of 32,194.58. The gauge had lost 98.43 points on Wednesday.
The Nifty slumped by 67.85 points, or 0.67%, but managed to close above the 10,000-mark at 10,013.65 after touching a low of 9,998.25.
Lupin took the biggest blow plunging 3.80%, followed by Coal India 3.36%. Lenders such as HDFC, HDFC Bank and ICICI Bank too had a tough time, causing the maximum damage.
State-owned PNB plunged 5.98% and Canara Bank 3.27% while country's largest lender SBI lost 2.24%. The rupee, which strengthened against the dollar to trade at a fresh two-year high, failed to lift sentiment.
A monthly survey released on Thursday showed that July services PMI fell to its lowest level in nearly four years following implementation of GST, which made participants more anxious.
The Nikkei India Services Purchasing Managers' Index (PMI), a pointer to services output on a monthly basis, plunged to 45.9% in July, the lowest since September 2013, from June's eight-month high of 53.1.
"Disappointed by yesterday's decision of the central bank, interest rate sensitive stocks were under pressure today. If the RBI had shifted its stance from neutral to accommodative, the extent of the impact could have been minimal," said Vinod Nair, Head of Research, Geojit Financial Services.
Global markets trended lower despite a strong lead from Wall Street after the Dow Jones closed above the 22,000 mark for the first time propelled by strong corporate earnings.
Foreign portfolio investors (FPIs) net purchased shares worth Rs473.72 crore on Wednesday, as per provisional data. Domestic institutional investors (DIIs) net sold shares of Rs232.95 crore.
The broader markets too were in a bearish form. However, among the smart movers were Reliance Industries, which surged 1.38% to close at a record high.
Bharti Airtel climbed 2.01% whereas Bajaj Auto settled 1.14% higher. Key indices in rest of Asia turned lower. In the Euro zone, the premier indices too moved in the loss zone.