Markets shed 2% on banks fall

Markets shed 2% on banks fall

Mumbai: Indian shares extended losses to 2% on Tuesday afternoon, led by losses in banks, as the central bank laid the groundwork for raising interst rates, even as it maintained status quo on its key rates at the policy review.

At 2:28pm, the 30-share BSE index was down 2.03% at 16,400.28 points, with 26 components falling. The 50-share NSE Index was down 2.15% at 4,863.85.

Indian shares extended losses to 1% on late morning, led by losses in banks, which edged lower after the central bank’s quarterly monetary policy review and as global cues stayed weak.

At 11:55am, the 30-share BSE index was down 1.07% at 16,560.91 points, with 25 components declining. The 50-share NSE Index was down 1.2% at 4,913.10.

“We will continue to trade lower today. There won’t be any change in direction after RBI’s policy, because we as it is do not expect many changes there," said D. D. Sharma, senior vice-president at Anand Rathi Securities.

“The important support level of 4,950 on Nifty is broken. If we close below that level today, the trend in near-term will be negative," added Sharma.

Private lender ICICI Bank was down 0.6% at Rs885.85, while rival HDFC Bank shed 1.15% to Rs1,668.50.

Top lender, State Bank of India, bucked the trend, and rose 0.9% to 2,326.90.

Energy giant Reliance Industries extended losses and was down 1% at 1,994.50.

Wipro, the country’s third-largest software services firm, led the gainers, as it beat estimates with a 21% rise in quarterly profit and forecast strong growth as it won new outsourcing deals and pricing pressure eased.

The stock was up 3.7% at Rs613, and the sentiment helped pull up other sectoral stocks as well.

“In the subsequent quarters Indian IT firms will see higher volume play on a stable pricing plane," Deven Choksey, managing director and CEO of K. R. Choksey said.

“This should return companies to report sequential growth over the next 4-6 quarters gradually," added Choksey.

Sector leader Tata Consultancy climbed 1% while next in rank Infosys Technolgoies gained half a percent.

Top vehicles maker Tata Motors rose 2.3% to Rs551.80, after it beat forecasts with a second-quarter profit of more than double over last year.

“With improvement in the M&HCV (medium and heavy commercial vehicles) volumes and higher demand for its LCV (light commercial vehicle) products, Tata Motors is set to reap the benefit of the recovery in the economy," Surjit Arora, analyst at brokerage Prabhudas Lilladher said in a note.