BackSensex closes 134 points lower ahead of RBI policy review
Nifty retreats from a record high as blue chips fall on risk aversion in global markets after gold, oil tumbled; caution prevails ahead of RBI's policy review
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Mumbai: The Nifty retreated from a record high on Monday as blue chips fell on risk aversion in global markets after gold and oil tumbled, while caution also prevailed a day ahead of the Reserve Bank of India’s (RBI’s) policy review.
Plunging prices for commodities, hit by slowing factory activity in China and Europe, raised fears of deflation and hammered emerging market stocks and commodity-linked currencies.
Investors await the central bank’s policy review on Tuesday with markets already pricing in a rate cut amid a slump in crude oil prices, although only 4 out of 45 economists in a Reuters poll said RBI will cut rates.
“It will be mistake if RBI doesn’t cut rates on Tuesday. You can’t sit in an island of inflation amid a crude oil slump and world worrying about low growth," said G. Chokkalingam, founder of Equinomics, a research and fund advisory firm.
The 50-share Nifty closed down 0.38%, or 32.35 points at 8,555.90, after earlier hitting a record high of 8,623.
The benchmark S&P BSE Sensex ended 0.47%, or 134.37 points, lower at 28,559.62, snapping its three-day gaining streak.
India’s outperformance in 2014 and the over-exposure of emerging market funds are also prompting investors to lock in profits.
Credit Suisse trimmed India overweight to 10% from 15% versus emerging market benchmarks.
Oil explorers led the falls after oil slid to five-year lows in its longest losing streak since 2008.
Reliance Industries Ltd fell 2.94% to ₹ 961.75, Oil and Natural Gas Corp. Ltd ended down 3.98% at ₹ 364.40 and Cairn India Ltd lost 1.3% to ₹ 257.15.
Select lenders also fell. Housing Development Finance Corp. Ltd fell 1.89% to ₹ 1,138.15, while State Bank of India (SBI) lost 0.62% to ₹ 319.45.
Larsen and Toubro Ltd fell 1.12% to ₹ 1,621.70 on worries lower crude prices may lead to lower investment and order flows from the Middle East.
Mahindra and Mahindra Ltd lost 2.09% to ₹ 1,296.10 after its November vehicle sales fell 13% on year.
Among gainers, crude oil users rose on hopes of higher operating margins and increased discretionary spend in the economy.
Jet Airways India Ltd gained 8.09% to ₹ 348.10, Apollo Tyres Ltd rose 1.97% to ₹ 232.65 while Hindustan Petroleum Corp. Ltd was up 1.16% to ₹ 603.65.
Berger Paints India Ltd surged 11.78% to ₹ 439.20, while Asian Paints Ltd advanced 7.13% to ₹ 796.75.
Jewellery firms also surged after India scrapped a rule that mandated trading companies to export 20% of the gold imported.
Titan Co. Ltd gained 5.30% to ₹ 389.65, Tribhovandas Bhimji Zaveri Ltd jumped 19.28% to ₹ 179.10 and Gitanjali Gems Ltd surged 19.96% to ₹ 60.10, while PC Jeweller Ltd ended up 2.78% at ₹ 248.05.
Since the beginning of this year, the Sensex has gained 35.78%, while foreign institutional investors have bought $15.88 billion from local equity markets. Reuters
Mint’s Ravindra Sonavane contributed to this story.
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