Sensex, Nifty edge lower ahead of RBI rate decision3 min read . Updated: 04 Jun 2019, 03:40 PM IST
- Most market participants expect the RBI to lower repo rate by 25 bps on Thursday
- TCS and HCL Tech led the decline in IT stocks
Indian shares ended lower today, retreating from Monday's record close, as investors awaited the Reserve Bank of India's policy meet outcome later this week. India's economy grew at its slowest pace in more than four years in the January-March period, according to data released last week, raising prospects of a rate cut by the Reserve Bank of India (RBI) at its June 4-6 policy meeting.
The Sensex ended 184 points lower at 40,083, led by decline in IT and pharma stocks. The Nifty settled 0.55% lower at 12,021.
"The pressure on the Reserve Bank of India (RBI) to cut interest rates this week has mounted dramatically, considering the 20-quarter slowest headline GDP growth of 5.8% in 4Q FY19 and the headline inflation at sub-3%. Whether the RBI should complement it further with liquidity-easing measures is also debated. In the absence of fiscal space to boost the economy, the RBI is expected to maintain a delicate balance between short-term relief and long-term strategy," said Nikhil Gupta, chief economist at Motilal Oswal Financial Services.
The Nifty IT index fell 1.5%, with TCS, HCL Tech and Infosys between 1% and 2%.
Adani Ports announces share buyback of as much as rs 1,960 crore up to 3,92,00,000 equity shares from the equity shareholders of the company as on 21 June, 2019. The shares will be paid at a price of ₹500 per equity share.
The board also, recommended final dividend at 10% per equity share of ₹2 each for the financial year ended 31 March, 2019 subject to the approval of the shareholders at the Annual General Meeting.
Shyam Steel Industries has filed draft papers with markets regulator Sebi for its initial public offering. The IPO consists of fresh issue of up to ₹200 crore and an offer for sale of up to 66.70 lakh shares, comprising up to 11.60 lakh shares by the promoter selling shareholders and up to 55.09 lakh shares by other selling shareholders, according to the Draft Red Herring Prospectus (DRHP). Market sources said the IPO size is estimated to be around ₹500 crore.
Even after global rating agency Fitch downgraded Axis Bank by a notch from 'BBB-' to 'BB+', the shares of the private sector bank touched 52-week high.
Shares of the bank touched a high of ₹826.40 on BSE while on NSE it was up 1.6%, making 52-week high of ₹827.60.
Shares of Swaraj Engines were higher 2% higher in noon trade after M&M increased its stake in the company by purchasing 1,77,586 equity shares, representing 1.46% of the paid-up share capital of SEL.
“The stocks offer stability and steady growth," said Mahesh Patil, co-chief investment officer at Aditya Birla Sunlife Mutual Fund, which oversees assets of about $13 billion. “We don’t expect valuations to correct too much for consumer companies. They may consolidate a bit, but in a correction, we would look at them." Companies such as ITC Ltd., Hindustan Unilever Ltd. and Marico Ltd., which sell everything from grains to beverages to detergents, have lost their shine on the stock market as a cash squeeze caused by the crisis in some finance firms hurt demand even for staples. (Read: A $13 billion fund makes contrarian bet on India consumer stocks)
The Nifty auto index was trading marginally in the green, with tyre stocks MRF and Apollo Tyres both up over 2%. Motherson Sumi, TVS Motor, Eicher Motor and Exide Ind were also higher. (Read: Why auto stocks are racing ahead at a time when sales volumes are in reverse gear)
Shares of IDBI Bank were up 8.5% at ₹39.95. So far during the day, IDBI Bank shares traded in the range of ₹40.55 to ₹36.70, as compared to its previous close of ₹36.90.
Devang Shah, technical analyst at Angel Broking, says that Nifty has support at 12000 followed by 11920. On the higher side, he says, a move towards 12,240–12,280 cannot be ruled out.
The index for PSU banking stocks, Nifty PSU Bank, was up 1.2% in early trade. OBC, Syndicate Bank, Union Bank, Allahabad Bank and Canara Bank were up between 2% and 4% in early trade.
Shares in Asian market inched higher and safe-haven assets gave up some overnight gains on Tuesday, as investors paused for breath after a volatile Wall Street session, but deeper concerns about growth have capped broader improvements in risk sentiment.
Most equity markets in the region shook off Wall Street's overnight weakness, which took the Nasdaq into correction territory. In early trade, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.17%.
US manufacturing growth slowed further in May to its weakest pace in more than two-and-a-half years, defying expectations for a modest rebound.
On Monday, the Nasdaq fell 1.61% to 7,333.02, taking it more than 10% lower than its May 3 closing record, as fears that US antitrust regulators could target Alphabet, Facebook and Amazon.com dragged down shares in those companies. The Dow Jones Industrial Average eked out a 0.02% gain to 24,819.78 and the S&P 500 lost 0.28% to 2,744.45.