The Sensex fell into the negative terrain after D Subbarao governor of the Reserve Bank of India (RBI) announced a hike of 25 basis points in the repo and reverse repo rates in the mid-year review of its credit policy. The CRR however has been left untouched at 6%. Realty stocks dropped the most followed by oil & gas and metal, while consumer durable and capital goods managed to trade in the positive.
Accordingly, the new repo rate, at which it lends to banks, stands at 6.25% and the reverse repo rate, at which it absorbs extra cash, at 5.25%.
Caveat on loans
The Reserve Bank has has upped bank provisioning for teaser loans to 2% from 0.4%. Also, the loan-to-value ratio of housing loans will not exceed 80%. Loans above Rs 75 lakh too have become expensive as the RBI has upped risk for home loans above the said amount to 125%.
Impact on bonds
The RBI has mentioned that it will cease hiking rates for now. This indicates clearly that there is a pause, which will have a positive impact on bonds.
Lenders such as State Bank of India and ICICI Bank as well as car makers Maruti Suzuki and Tata Motors were being watched, amid worries a hike in rates could curb consumer demand for loans.
Sensex Movers
Reliance Industries contributed fall of 29.9 points in the Sensex. It was followed by Tata Motors (6.9 points), Bharti Airtel (6.13 points), Sterlite Industries (India) (4.07 points) and Mahindra & Mahindra (3.32 points).
However, Larsen & Toubro contributed rise of 25.24 points in the Sensex. It was followed by H D F C Bank (13.3 points), State Bank Of India (11.39 points), Grasim Industries (6.22 points) and ACC (5.34 points).
Major gainers in the 30-share index were
ACC (4.04%),
Larsen & Toubro (1.77%),
H D F C Bank (1.22%),
NTPC (1.04%),
State Bank Of India (0.98%),
Hero Honda Motors (0.75%).
The biggest losers in the Sensex.D L F (1.65%),
Jindal Steel & Power (1.49%),
Tata Motors (1.40%),
Sterlite Industries (India) (1.23%),
Reliance Industries (1.17%),
Bharti Airtel (1.09%)
Mid & Small-cap Space
The BSE Mid and small caps outperformed their larger counterparts gaining 0.31% and 0.27% respectively.
The major gainers in the BSE Midcap were A I A Engineering (6.86%), Alstom Projects India (1.52%), Allahabad Bank (1.3%), Andhra Bank (0.36%) and Aban Offshore (0.11%).
The major gainers in the BSE Smallcap were A B G Shipyard (2.06%), A K Capital Services (1.96%), Action Construction Equipment (1.5%), Abhishek Industries (0.79%) and Aarti Industries (0.5%).
Sectors in Limelight
The Consumer Durables index was at 6,877.75, up by 97.05 points or by 1.43%. The major gainers were Bajaj Electricals (4.24%), Rajesh Exports (3.13%), Blue Star (1.47%), Whirlpool Of India (0.41%) and Gitanjali Gems (0.18%).
The Capital Goods index was at 16,331.61, up by 168.13 points or by 1.04%. The major gainers were A I A Engineering (6.86%), Jyoti Structures (1.7%), Bharat Electronics (1.42%), A B B (0.46%) and Crompton Greaves (0.14%).
The HC index was at 6,580.82, up by 30.76 points or by 0.47%. The major gainers were Glenmark Pharmaceutical (3.62%), Glaxo SmithKline Pharmaceuticals (1.83%), Dr Reddy`S Laboratories (1.06%), Apollo Hospitals Enterprise (0.52%) and Divis Laboratories (0.22%).
On the other hand, the Realty index was at 3,674.02, down by 66.61 points or by 1.78%. The major losers were D L F (1.65%), Indiabulls Real Estate (1.35%), Anant Raj Industries (1.01%), D B Realty (0.95%) and Ackruti City (0.54%).
Market Breadth
Market breadth was negative with 1,420 advances against 1,327 declines.
Value and Volume Toppers
BS TransComm topped the value chart on the BSE with a turnover of Rs. 3,303.86 million. It was followed by Reliance MediaWorks (Rs. 768.13 million), Tata Motors (Rs. 474.39 million) and A B G Shipyard (Rs. 430.58 million).
The volume chart was led by Cals Refineries with trades of over 8.14 million shares. It was followed by BS TransComm (6.74 million), Alok Industries (6.14 million) and Shree Ashtavinayak Cine Vision (5.99 million).
Nifty closed 1.45 points up at 6119
Sensex closed 9.94 points down at 20345.69:
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