Mumbai: Shares were trading 0.2% lower on Thursday, with financials, automakers and property developers leading the losses as investors prepared for a rate increase at the Reserve Bank of India’s (RBI) policy at 12:00 pm.
Wobbly investor sentiment across Asia following worries over Greece and a slowdown in United States also weighed.
The Reserve Bank of India is widely expected to nudge its key repo rate, or short-term lending rate, up by 25 basis points, citing surging inflation, but is expected to keep off from a larger rate hike given growth concerns.
At 10:53 am, the 30-share BSE index was down 0.24% at 18,088.11 points, with 20 components declining.
“A 25-basis point hike is factored in already. Let us watch out if there is anything more,” said Om Ahuja, head of private wealth management at Emkay Global.
“The major issue in the market has been lack of participation. But I think bottom-fishing is a good idea now,” he said, adding that he preferred mid- and small-cap companies to large-cap stocks.
Around 1,039 million shares were traded on the NSE, where losers were more than double the number of gainers.
Foreign funds have been net sellers of local shares for three sessions to 14 June, offloading $215 million.
The 50-share NSE index was down 0.4% at 5,426.75.
Leading private-sector lenders ICICI Bank and HDFC Bank were down 0.1% and 0.7% each. Market leader State Bank of India bucked the trend and edged 0.3% higher.
Automakers Tata Motors, Bajaj Auto, Maruti Suzuki and Mahindra & Mahindra were down between 0.3% and 1.5%.
Top-listed real estate firm DLF dropped 1.4%.
Reliance Industries dropped 0.7% to Rs894.45 after HSBC downgraded the energy major to “neutral” from “overweight” and cut the price target to Rs1,040 from Rs1,084.
The MSCI’s measure of Asian markets other than Japan was down 2.1% while Japan’s Nikkei dropped 1.6%.
Stocks on the move
• Software service exporters fell on concerns about a slowdown in the United States, their biggest market. Tata Consultancy Services, Infosys Technologies and Wipro fell between 0.8% and 2.2%.
• Ashok Leyland was up 2.4% at Rs51.70 after the country’s second-largest commercial vehicle maker said late on Wednesday its board had approved a bonus issue of shares in the ratio of 1:1.