Markets trade choppy after RBI rate hike

Markets trade choppy after RBI rate hike

Mumbai: The local equity indices continued their subdued mood in late morning session, there has been little reaction to the mid-year monetary policy review by the Reserve Bank of India, which hiked the repo and reverse repo rates by 25 basis points (bps) each to 5.25% and 6.25%, respectively as they came inline with the market expectations.

However, the Cash Reserve Ratio (CRR) has been kept steady at 6%. The regional peers were also trading mixed while the US index futures were marginally up by 12 points in screen trade. Back home, Cement stocks were edging higher on the back of healthy monthly sales and production numbers ACC and Ambuja Cements were witnessing good upmove. Index heavyweight, RIL and Tata Motors were though, down by over a percent.

The BSE Sensex was up by 19.23 points or 0.09% to 20,374.86. The index touched a high and a low of 20,414.47 and 20,296.28, respectively.

The main gainers in the BSE sectoral space were Consumer Durables (CD) up 1.36%, Capital Goods (CG) up 1%, Public Sector Undertaking (PSU) up 0.47% Healthcare (HC) up 0.44% and Power up 0.34%.

The main losers in the BSE sectoral space were realty down 1.02%, oil & gas down 0.47%, Metal down 0.35% , Auto down 0.29% and TECk down 0.02%.

The major gainers on the Sensex were ACC up 4.05%, L&T up 1.52%, HDFC Bank up 1.18%, NTPC up 1.09% and Hero Honda up 0.90%.

The major losers on the index were Jindal Steel down 1.35%, Sterlite Inds down 1.32%, Tata Motors down 1.31%, RIL down by1.29%and Bharti Airtel down 0.99 %.

The Reserve Bank of India (RBI) hiked its key short term policy rates repo and reverse repo by 25 basis points (bps) on Tuesday, implementing sixth rate hike since March this year. The new rates stand at 6.25% and 5.25% respectively. The central bank however indicated that it may take a pause in terms of policy tightening to see the transmission of the already taken steps.

The central bank maintained its growth projection at 8.5%. Further, the year-on-year money supply (M3) growth at 15.2% till early October 2010 while was below the RBI’s projection of 17.0%, non-food credit growth at 20.1% was close to the projection of 20.0%. The central bank said that there were some signs of pick-up in deposit and credit growth and therefore the M3 and non-food credit growth projections for 2010-11 have been retained at 17% and 20%, respectively.

The top gainers on the Nifty were ACC up 4.25%, Ambuja Cements up 3.54%, BPCL up 2.34%, L&T up 1.92% and Siemens up 1.83%.

The top losers on the index were Suzlon down 1.97%, DLF down 1.80 % Jindal Steel down 1.66%, Tata Motors down 1.41% and RIL down by1.28%.

Among other Asian indices, Hang Seng rose 0.07%, Straits Times jumped 0.59% and Seoul Composite advanced 0.17% while Jakarta Composite slid 0.26%, KLSE Composite trimmed 0.26%, Nikkei 225 slipped 0.09% and Taiwan Weighted dipped 0.33% and Shanghai Composite lost 0.29%.