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Sensex slips as RBI surprises with status quo; bank stocks bear the brunt

By: PTI | Mumbai |

Published: December 5, 2019 5:38:19 pm





After swinging between features and losses, the 30-share BSE Sensex lastly ended 70.70 factors or 0.17 per cent decrease at 40,779.59.

Equity benchmarks closed decrease in topsy-turvy commerce on Thursday after the Reserve Bank unexpectedly left rates of interest unchanged amid slowing development.

Citing prevailing inflation stress and rising meals costs, the six-member Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, unanimously voted to carry the key repo price at 5.15 per cent.

The inventory markets, which had opened in the inexperienced on price minimize hopes, tumbled after the financial coverage announcement.

Trading sentiment was additional dampened after the RBI minimize its GDP development forecast to five per cent for 2019-20 from the earlier estimate of 6.1 per cent.

After swinging between features and losses, the 30-share BSE Sensex lastly ended 70.70 factors or 0.17 per cent decrease at 40,779.59.

Similarly, the 50-scrip NSE Nifty settled with a lack of 24.80 factors or 0.21 per cent at 12,018.40.

On the Sensex chart, Bharti Airtel, Tata Steel, IndusInd Bank, HeroMoto Corp and Tata Motors have been amongst the main laggards, declining as much as 2.96 per cent.

Rate-sensitive auto, bank and actual property counters closed on a flat-to-negative be aware. In worth phrases, bank stocks accounted for many of the Sensex losses.

TCS, ITC, L&T, Infosys, Tech Mahindra and HDFC have been the solely gainers, spurting as much as 2.04 per cent.

“It was an surprising transfer with the RBI protecting the repo price unchanged at 5.15 %, as the market anticipated 25 bps minimize in repo price. With the RBI following a inflation concentrating on regime, the central bank centered on sustaining the inflation price inside the goal vary.

“The rising food inflation posed a challenge to the central bank in cutting the rates… However, by maintaining the accommodative stance, there is room for rate cuts in the future,” stated Deepthi Mary Mathew, Economist at Geojit Financial Services.

Sectorally, the BSE metallic index fell the most, adopted by primary supplies and vitality.
Capital items, IT and tech indices moved increased.

In the broader market, BSE midcap and largecap indices under-performed the benchmark. BSE smallcap index closed virtually flat.

The Indian rupee too confronted volatility after Reserve Bank’s coverage resolution however later discovered some stability. The rupee was buying and selling 18 paise increased at 71.35 (intra-day).

Crude oil benchmark Brent Futures rose 0.6 per cent to USD 63.38 per barrel.

After 5 consecutive cuts in rates of interest this yr, the six-member MPC unanimously voted to carry the key repo price at 5.15 per cent and reverse repo price at 4.90 per cent.

Bankers and economists had broadly anticipated the central bank to chop charges for a sixth time to help a slowing economic system, whose development price slipped additional to a six-year low of 4.5 per cent in the September quarter from 7 per cent a yr again.

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