Repo rate cut fails to ignite markets
Equity benchmark indices Sensex and Nifty ended lower on Friday as the RBI’s rate cut did not spring any major surprise for the markets and investors turned to profit-taking amid foreign fund outflows.
Mumbai: Equity benchmark indices Sensex and Nifty ended lower on Friday as the RBI’s rate cut did not spring any major surprise for the markets and investors turned to profit-taking amid foreign fund outflows. Registering its third day of decline, the 30-share BSE benchmark Sensex dropped 197.97 points or 0.25 per cent to settle at 77,860.19, in a volatile trade. During the day, it lost 582.42 points or 0.74 per cent to 77,475.74. The NSE Nifty declined 43.40 points or 0.18 per cent to 23,559.95.
From the 30-share blue-chip pack, the stock of ITC dipped over 2 per cent after the diversified entity reported a 7.27 per cent decline in consolidated net profit to Rs 5,013.16 crore for the December quarter on account of subdued demand and sharp escalation in input costs. State Bank of India, Adani Ports, Tata Consultancy Services, ICICI Bank, Reliance Industries and PowerGrid were also among the laggards.
“As the rate cut did not spring any major surprise, investors did not find anything interesting in the new RBI governor’s comments, which resulted in a steady bout of profit-taking in banking, oil & gas, FMCG and power stocks. The ongoing earnings have been mixed to subdued, while relentless selling of domestic shares by the FIIs have prompted investors to maintain caution,” said Prashanth Tapse, senior V-P (research), Mehta Equities Ltd.
The BSE smallcap gauge declined 0.68 per cent, while BSE midcap index climbed 0.13 per cent. “A rate cut aimed at reviving the slowing economy is a positive indicator. However, yields edged higher as investors were disappointed by the absence of anticipated liquidity measures, leading to profit-booking in the indices. Additionally, a downward revision in the near-term growth forecast, influenced by global trade policies and inflation concerns, suggests that the central bank will adopt a cautious and gradual approach to future rate adjustments.
