 "Financials drag Nifty to end below 7,950")
In the absence of any fresh triggers, benchmark indices finished today’s session on a lacklustre note mainly due to a decline in the banking shares after the Reserve Bank of India (RBI) in its fifth bi-monthly monetary policy on Tuesday maintained a status quo as regards key rates.
In order to make sure the benefit of rate-cuts is passed on to the consumers, the central bank has decided to finalise the methodology for banks to effectively pass on the benefit.
The 30- share Sensex ended 52 points lower at 26,118 while the 50 share Nifty ended 24 points lower at 7,931. Meanwhile, the broader markets outperformed their larger peers with BSE Midcap and Smallcap indices ending between 0.1-0.2%.
"Nifty traded dull on Wednesday and ended marginally in red, tracking weak domestic cues. Mainly, underperformance from the banking and finance counters hurt the sentiment and that further worsened with decline in IT & capital goods. However, the downside remained capped due to noticeable buying in defensive pack i.e. FMCG and Pharma majors," said Jayant Manglik, President, Retail Distribution, Religare Securities in a note.
"We were expecting this fall in Nifty but situation will be clear only by the end of the week. Meanwhile, traders should remain cautious and prefer defensive stocks for fresh long positions. On short side, stocks from PSU banks and capital goods space can be considered," he adds.
ECB meet
ECB meet
Globally, the investors are cautious ahead of the policy review meeting of European Central Bank (ECB), which will be held tomorrow. The European equities are trading lower
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The Organization of Petroleum Exporting Countries (OPEC) will hold a summit on Friday to decide on whether to proceed with a production cut or hold on to the current levels of oil production. The global crude oil prices are currently at $ 41.37 per barrel.
STOCKS IN FOCUS
One of star performers in today’s trade was Tata Steel. The stock gained 2.5% after its unit incorporated in Singapore TS Global Holdings signs agreements with a group of 16 mandated lead arrangers for $1.5 billion of loan facilities. Group of banks include Australia and New Zealand Banking Group, Axis Bank, Bank of America, BNP Paribas, HDFC Bank, ICICI Bank, Citigroup Global, Standard Chartered, among others. Meanwhile, Vedanta and Hindalco added between 0.2-0.7%.
Another sector that gained limelight was the auto sector. Shares of auto companies rose on the back of robust sales numbers. Maruti, Hero Motocorp surged between 1-2.5%. Meanwhile, Bajaj Auto and M&M ended flat.
Two prominent gainers in the Sensex 30 pack were ONGC and RIL up between 0.1-0.5%.. International oil and gas consultant DeGolyer & MacNaughton (D&M) on Tuesday gave its final report on the dispute between ONGC and RIL, establishing natural gas — believed to be worth Rs 11,000 crore.
Shares of aviation companies moved higher by up 13% on the back of heavy volumes. Jet Airways (India) and SpiceJet gained 10% and 7% each. Jet fuel, or aviation turbine fuel (ATF), prices were cut on Tuesday by a marginal 1.2%, the third reduction in three months. Jet fuel constitutes over 40% of an airline's operating costs and the price cut will bring relief to the cash-strapped carriers.
On the flip side, shares of capital goods companies L&T and BHEL closed lower between 1-3% on the back of disappointing PMI numbers touching a two year low.
In the financial space, SBI, ICICI Bank, HDFC twins and Axis Bank shed between 0.5-2% after RBI decided to announce methodology to calculate base rates in order to make sure that banks pass rate cut benefit to the customers.
Shares of many companies based out of Chennai closed in red after the city has been marooned by incessant rains that have crippled the operations of these companies. Infosys, TCS, Natco Pharma, Chennai Petroleum Corporation and India Cements slipped between 1-2.5%.