Key share indices ended near their 2-year lows amid a volatile trading session Friday after the Reserve Bank of India, in its monetary policy review, highlighted growth concerns.
"While inflation remains on its projected trajectory, downside risks to growth have clearly increased. Further rates hike may not be warranted," the Reserve Bank of India (RBI) said in it its mid-quarter review of monetary policy.
The 30-share Sensex provisionally ended at 15,485.40 down 351.07 points or 2.2% and the 50-share Nifty ended at 4,646.35 down 100 points or 2.1%
On November 3, 2009 the Sensex had ended at 15,404.94 and the Nifty had ended at 4,563.90.
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Updated at 15:15hrs
Indices have collapsed by over 2% on the growth concern comment made by RBI in the Monetary Policy announcement. The Sensex and the Nifty have broken the important 15,500 and 4,650 levels respectively.
Concerned over economic slowdown, the Reserve Bank today kept interest rates unchanged and indicated that it could cut key policy rates from now onwards to arrest falling growth while keeping a close vigil on inflation.
"While inflation remains on its projected trajectory, downside risks to growth have clearly increased. Further rates hike may not be warranted," the Reserve Bank of India (RBI) said in it its mid-quarter review of monetary policy.
The economic growth has come down to 6.9% in the second quarter of the current fiscal from 8.1% in the corresponding quarter in the previous financial year even as inflation remains close to the double-digit mark. The industrial growth registering a negative growth of 5.1% in October too may have prompted RBI to maintain the status quo.
By 1510 hrs, Sensex was down 378 points at 15,558 and the 50-share Nifty plummeted 98 points at 4,648.
BSE Capital Goods index has plummeted 4%. L&T and Capital Goods are down between 4-5%.
BSE Bankex has plunged 3%. HDFC Bank, SBI and ICICI Bank have plunged between 2-4%.
Amongst Metal pack, the main draggers are Sterlite, Tata Steel, Coal India and JSW Steel, all melting between 2-5%.
The broader indices too have slumped into red zone – BSE Midcap and Smallcap indices are down 1% each.
The market breadth in BSE turns unhealthy with 885 advancing and 1791 shares declining.
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(Update at 1425 hrs)
The markets have dipped in the red in late-afternoon trades, after having traded firm since opening, in wake of the Reserve Bank of India's (RBI) mid-term monetary policy review. The BSE Sensex is at 15,850, down 14 points and the Nifty is at 4,739, down six points.
The RBI in its monetary policy review paused its rate hike cycle after continuously raising the key policy rates thirteen times in one year. Looking at the overall slowdown in the growth and fall in inflation, the central bank kept the key rates unchanged. The inflation projection for March FY12 is kept at 7 per cent.
Earlier in the day, the BSE benchmark index touched the day's high at 16,069 and the day's low at 15,840.
The consumer durable stocks are witnessing buying in today's session. The BSE Consumer Durables index has jumped, nearly 2% to 5,420. Titan Industries, Bajaj Electricals, Videocon Industries and C Mahendra Exports, up 1-4% each, are the notable gainers.
From the rate-sensitive auto space, Tata Motors, Bharat Forge, Mahindra & Mahindra and Bajaj Auto are trading higher by 2-3% each.
BSE Bankex and Realty indices are trading lower by 1%.
BSE Capital Goods index is witnessing some selling pressure and is the major loser among the indices, down nearly 2%. BGR Energy Systems, Punj Lloyd, Lakshmi Machine Works, Suzlon Energy and Larson & Toubro are the prominent losers from the space, down 2-5% each.
Among individual stocks, Apollo Hospitals Enterprises has surged 13% to Rs 539, recovering from its 14% fall on hursday, after the company clarified on enquiries with regard to the recent allotment of 3.09 million equity shares of Rs 5/- each to Dr. Prathap C.
Spanco has surged 11% to Rs 73 on news that the company has received a five-year tax holiday from Nigeria for creating more jobs in the country's outsourcing sector.
The overall market breadth is positive as 1,310 stocks have advanced against 1,271 declining ones, on the BSE.