Tuesday, October 27, 2009

Sensex hit by RBI policy, ends 400 pts down

markets ended near day’s low Tuesday as sentiments turned bearish after the Reserve Bank of India’s credit policy review. All the sectors ended in the red with realty, metals and banks in the lead. ( Watch )

National Stock Exchange’s Nifty closed at 4841.40, down 129.50 points or 2.61 per cent. The broader index touched a low of 4829.50 and high of 4970.55.

Bombay Stock Exchange’s Sensex ended at 16330.60, down 409.90 points or 2.45 per cent. The index hit a low of 16311.50 and high of 16699.09.

BSE Midcap Index was down 3.71 per cent and BSE Smallcap Index slipped 4.33 per cent.

At its monetary policy review, the Reserve Bank of India left all key rates unchanged. The central bank hiked SLR to 25% from 24%. The reverse repo rate was left unchanged at 3.25% and CRR at 5%. The inflation target has been hiked to 6.5% from 5% while the FY10 GDP target remains unchanged at 6% with upward bias.

The Reserve Bank of India increased provisioning for commercial real estate loans to 1 percent from 0.4 percent for standard assets. This had a negative impact on realty shares.

BSE Realty Index plunged 6.11 per cent, BSE Metal Index fell 5.76 per cent and BSE Bankex Index fell 3.97 per cent.

Reliance Capital (-8.06%), Hindalco Industries (-7.87%), Unitech (-7.71%), Reliance Communications (-6.91%) and Bharti Airtel (-6.84%) suffered massive losses.

Biggest Nifty gainers were Wipro (2.24%), Tata Motors (1.41%). Sun Pharmaceuticals (1.19%), BPCL (0.81%) and Cipla (0.47%).

Market breadth was extremely negative with 2274 declines outnumbering 453 advances on BSE.

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