Stock Report: Sensex ends 242 points down; bank stocks plunge

Mumbai, Aug 6: A benchmark index of Indian equities markets Wednesday lost 242 points or 0.94 percent on negative global cues and caution in banking stocks. Heavy selling was observed in bank, metal, automobile, healthcare, fast moving consumer goods (FMCG) and oil and gas stocks.

However,
information technology
(IT) and technology, entertainment and media (TECK) sectors came under sustained selling pressure. The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 25,892.55 points, closed trade at 25,665.27 points, down 242.74 points or 0.94 percent from the previous day’s close at 25,908.01 points.

The Sensex touched a high of 25,901.68 points and a low of 25,621.85 points intra-day. The markets turned bearish a day after the Reserve Bank of India (RBI), as expected, left key interest rates unchanged in its third bi-monthly monetary policy review for the 2014-15 fiscal.

The repo rate, or the interest that banks pay when they borrow money from the RBI to meet their short-term fund requirements, has been left unchanged at 8 percent. The reverse repo rate, or the interest that the RBI pays to commercial banks when they park their surplus short-term funds with the central bank, has been adjusted to 7 percent.

The Cash Reserve Ratio (CRR) is left unchanged at 4 percent. The marginal standing facility rate and the Bank Rate has also been kept unchanged at 9 percent. The statutory liquidity ratio (SLR), the mandatory amount of bonds lenders must keep with the RBI, was cut by 0.5 percent to 22.00 percent of their net demand and time liabilities (NDTL) with effect from Aug 9, 2014.

“Banking stocks witnessed selling pressure with banking major witnessing decent fall for the day. FMCG major witnessed major drag for the day,” said Shrikant Chouhan, head- technical research, Kotak Securities. ”Commodities stock witnessed cool off after strong session of yesterday.”

In the day’s trade, the S&P BSE bank index decreased by 318.64 points, metal index fell 250.92 point, automobile index was down 113.58 points, healthcare index plunged by 95.96 points, FMCG index climbed 89.50 points and oil and gas index was lower by 71.66 points. However, IT index was up 65.63 points, TECK index was marginally higher by 5.55 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed the trade 74.50 points or 0.96 percent down at 7,672.05 points. ”Nifty opened on a negative note around 7,730 levels, selling got accelerated at breach of 7,700 levels and market closed the day at weak note around 7,670 levels,”Chouhan said.

The major Sensex gainers were: Infosys, up 2.01 percent at Rs.3,574.70; BHEL, up 0.66 percent at Rs.229.55; Mahindra and Mahindra, up 0.55 percent at Rs.1,236.75; Hero MotoCorp, up 0.48 percent at Rs.2,596.55; and Reliance Industries, up 0.42 percent at Rs.987.75. The losers were: ITC, down 2.63 percent at Rs.346.40; ICICI Bank, down 2.60 percent at Rs.1,446.85; Axis Bank, down 2.42 percent at Rs.383.20; Sesa Sterlite, down 2.26 percent at 288.15; and Tata Steel, down 2.06 percent at Rs.550.15.

Among the Asian markets, Japan’s Nikkei fell 1.05 percent, and Hong Kong’s Heng Seng was 0.26 percent points lower. China’s Shanghai Composite Index, lost 0.11 percent lower. In Europe, London’s FTSE 100 was down 1.16 percent, Germany’s DAX Index fell 1.18 percent, and France’s CAC 40 was 1.12 percent lower.