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RBI proposes, mkt disposes
An unexpected rate cut by the Reserve Bank on Wednesday powered the Sensex to cross the historic 30,000 mark but sustained selling across sectors dragged down the benchmark by a sharp 213 points at close, snapping a four-day Budget rally.
Sensex down 213 pts on profit-booking after crossing 30K mark on rate cut
Mumbai: An unexpected rate cut by the Reserve Bank on Wednesday powered the Sensex to cross the historic 30,000 mark but sustained selling across sectors dragged down the benchmark by a sharp 213 points at close, snapping a four-day Budget rally.
It was a memorable moment for the India markets as both the indices, the BSE Sensex and the NSE Nifty, conquered the 30,000 and 9,100 milestone respectively in early trade as RBI Governor Raghuram Rajan surprised the street for the second time in two months by cutting the benchmark interest rate by 0.25 per cent.
However, the initial excitement proved to be short-lived as investors, both domestic and foreign, started booking profits after the 850-point rally in previous four sessions.
The Sensex, which logged its all-time high of 30,024.74 within minutes of opening, fell to the day’s low of 29,289.05 in the last 90 minutes of trading before closing at 29,380.73 - down 213 points or 0.72 per cent.
The 50-share NSE Nifty also made a new high 9,119.20, surpassing its previous intraday high of 9,008.40 hit on Tuesday. However, the emergence of profit-booking at record levels dragged the index down by 73.60 points, 0.82 per cent down, to 8,922.65 at closing bell.
Major laggards in Sensex included Sesa Sterlite, Hindalco, Tata Power, Axis Bank, SBI, M&M, Coal India and Wipro. Banking, metal, power and auto shares faced the brunt.
Outlook for Thursday: Mid-session better
‘Buy on Rumour Sell on News’ is once again proved correct. Despite rate cut from RBI, Nifty fell sharply to close with a loss of 73 points. S&P comment appears to have played havoc on markets. However, Nifty would turn bearish for short term on a close below 8875. Nifty spot is expected to encounter resistance at 8965, 9000 and find support at 8885, 8850. While global cues, quarterly results and funds flow are expected to broadly guide the market movement, based on the present market position, market can be expected to remain generally better during the midsession. – Dr B Amaranatha Sastry
