MUMBAI, July 16 (Business Standard): Markets snapped three-day winning
streak to end lower on Tuesday after the central bank's move to reduce
rupee liquidity and an increase in short-term rates dashed hopes of rate
cut in the near term thereby raising growth concerns.
The 30-share Sensex ended down 183 points at 19,851 and the 50-share Nifty closed 76 points lower at 5,955.
The rupee was trading higher by 57 paise to 59.32 to the dollar on selling by banks after the Reserve Bank announced a slew of measures to arrest the local currency's fall against the greenback.
There is a risk that the recently announced measures could backfire. India's growth is already very weak and tighter domestic liquidity will worsen the financial conditions for corporates and banks, hurting asset quality and the growth outlook, Nomura said in a note today.
Bank of America Merill Lynch (BofA-ML) today revised India's GDP growth forecast lower to 5.5 per cent for this fiscal from 5.8 per cent earlier, as Reserve Bank's tightening measure is likely to push back lending rate cuts.
"We have cut our FY14 growth forecast to 5.5 per cent from 5.8 per cent earlier as RBI's tightening will push back lending rate cuts," BofA-ML said in a research note today.
Rate sensitive shares were among the top losers today with financials leading the decline. BSE Realty Index was the top loser among sectoral indices on the BSE down 5.6 per cent followed by Bankex, capital goods, metal, consumer durables and auto among others.
PSU banks witnessed profit taking on account of rising bond yields while some of the private banks dependent on short-term funding also witnessed profit taking after the central bank hiked short-term rates.
In the financials segment, ICICI Bank, HDFC, HDFC Bank, Axis Bank, Bank of Baroda, PNB and SBI ended down 2-6 per cent each. Among private banks, Yes Bank slumped nearly 10 per cent while IndusInd Bank ended nearly 8 per cent lower.
Among the auto pack, Mahindra & Mahindra, Maruti Suzuki, Hero MotoCorp ended 1-2 per cent lower.
Other Sensex losers include, L&T, Dr Reddy's Labs and Infosys among others.
The 30-share Sensex ended down 183 points at 19,851 and the 50-share Nifty closed 76 points lower at 5,955.
The rupee was trading higher by 57 paise to 59.32 to the dollar on selling by banks after the Reserve Bank announced a slew of measures to arrest the local currency's fall against the greenback.
There is a risk that the recently announced measures could backfire. India's growth is already very weak and tighter domestic liquidity will worsen the financial conditions for corporates and banks, hurting asset quality and the growth outlook, Nomura said in a note today.
Bank of America Merill Lynch (BofA-ML) today revised India's GDP growth forecast lower to 5.5 per cent for this fiscal from 5.8 per cent earlier, as Reserve Bank's tightening measure is likely to push back lending rate cuts.
"We have cut our FY14 growth forecast to 5.5 per cent from 5.8 per cent earlier as RBI's tightening will push back lending rate cuts," BofA-ML said in a research note today.
Rate sensitive shares were among the top losers today with financials leading the decline. BSE Realty Index was the top loser among sectoral indices on the BSE down 5.6 per cent followed by Bankex, capital goods, metal, consumer durables and auto among others.
PSU banks witnessed profit taking on account of rising bond yields while some of the private banks dependent on short-term funding also witnessed profit taking after the central bank hiked short-term rates.
In the financials segment, ICICI Bank, HDFC, HDFC Bank, Axis Bank, Bank of Baroda, PNB and SBI ended down 2-6 per cent each. Among private banks, Yes Bank slumped nearly 10 per cent while IndusInd Bank ended nearly 8 per cent lower.
Among the auto pack, Mahindra & Mahindra, Maruti Suzuki, Hero MotoCorp ended 1-2 per cent lower.
Other Sensex losers include, L&T, Dr Reddy's Labs and Infosys among others.
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