Mumbai, Dec 2 (IANS) Just ahead of the Reserve Bank of India’s (RBI) fifth bi-monthly monetary policy review, a benchmark index of Indian equities markets was trading 105.50 points or 0.37 percent down.
Heavy selling pressure was seen in interest sensitive stocks like automobile, bank and information technology (IT).
However, healthy buying was observed in capital goods, healthcare and fast moving consumer goods (FMCG) sector.
The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 28,522.46 points, was trading at 28,454.12 points (at 10.30 a.m.) in the early session, down 105.50 points or 0.37 percent from the previous day’s close at 28,559.62 points.
The Sensex touched a high of 28,541.96 points and a low of 28,446.22 points in the trade so far.
The recent economic data which showed easing of retail and consumer inflation and a down turn in industrial and gross domestic product (GDP) expansion have led the India Inc. to demand for a rate cut.
“Markets are hoping for a rate cut in the RBI policy meeting next week. Going ahead, apart from the RBI meeting, fiscal reforms from the government will be needed for the markets to move higher on a sustainable basis,” said Dipen Shah, head of private client group research, Kotak Securities.
However, Geojit BNP Paribas’ head – fundamental research, Vinod Nair said the RBI’s commentary will be important to understand the possibility to cut rate, if not Dec 2 but by next policy review.
“Bank stocks have reason to be disappointed as RBI is not likely to cut rate now. Continuous increase in rupee may tend RBI to wait and understand the trajectory post Nov 2014 due to base impact as mentioned in Sep 14 policy,” Nair said.
The S&P auto index plunged by 173.73 points, bankex went down by 121.99 points and IT index slipped by 80.27 points. However, capital goods index rose 58.12 points, followed by healthcare index which gained by 43.42 points and FMCG index was higher by 21.62 points.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading in te red. It was down 29.70 points or 0.35 percent at 8,526.20 points.