The domestic market closed on a negative note on Thursday with the Bombay Stock Exchange Sensex and the National Stock Exchange Nifty plummeting after their brilliant performance on Wednesday. Apprehensions about the Reserve Bank of India’s monetary policy meet and muted Asian cues influenced the sluggish mood, as investors remained cautious in the early morning trade.
Sensex was down 46.90 points and ended at 29,927.34 points, while Nifty fell three points and closed at 9,261.95 points. Analysts told MoneyControl that investors may have booked profits from the previous session and were now playing it safe.
The RBI on Thursday kept the repo rate – the rate at which the central bank lends to commercial banks – unchanged at 6.25%. However, it increased the reverse repo rate to 6% from 5.75%.
“There was surge in liquidity in the system after demonetisation that the RBI had to absorb,” RBI Governor Urjit Patel said after the key rates were announced. “The bank focused on removing the liquidity overhang.”
During the day, the BSE Banking index was trading lower at 0.28%, with Federal Bank plummeting by 2.3%, followed by ICICI Bank (-1.4%) and SBI (-1.1%). Axis Bank (+0.43%) and HDFC Bank (+0.17%) traded in green on the BSE.
However, stocks of auto majors like Tata Steel (+1.68%) and Bajaj Auto (+1.46%) and those of Infosys (+0.38%), GAIL (+1.18%) and NTPC (+0.51%) traded in green and helped pull up the market. The biggest loser on the 30-share index was ITC which went down 1.65%.
Tata Steel performed well on Nifty too and turned out to be the biggest gainer while going up over 2%. Zee Entertainment Enterprises Limited, Bajaj Auto followed Tata Steel on the top gainers list. Meanwhile, Hindalco (-2.19%), ITC (-1.77%) and State Bank of India (-1.72%) were the biggest losers on the NSE.
The rupee, on the other hand, closed at 64.5 against a dollar and went down 0.48%. The home currency was a tad lower than its Wednesday’s close of 64.88.
The Asian market had also opened on a weak note after the minutes from the United States Federal Reserve meeting hinted at a tighter monetary policy. South Korea’s won was down 0.72%, while Taiwan’s dollar dropped 0.32%. The Malaysian ringgit and China’s renminbi were down by 0.13%, 0.05%, respectively. However, Japan’s yen was up by 0.2%.
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