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Sensex trims losses after Rajan indicates pause in rate hikes

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Press Trust of India Mumbai
Last Updated : Jan 28 2014 | 5:29 PM IST
After falling over 150 points in a knee-jerk reaction to RBI rate hike, the Sensex trimmed losses to end a mere 24 points down today after Governor Raghuram Rajan indicated that further tightening may not be needed.
The BSE benchmark, which touched a two-month intra-day low after RBI increased the short-term lending rate by 0.25 per cent, was hit by a sharp 8 per cent drop in Maruti Suzuki India shares after announcing quarterly earnings.
The 30-share barometer resumed almost stable and immediately touched a high of 20,795.35. It fell after news of rate hike filtered in and tumbled to a low of 20,554.28.
Later, it rebounded on buying in metal, realty and FMCG stocks to end down by 23.94 points, or 0.12 per cent at 20,683.51. In three straight sessions, it has lost 690 points.
"...If inflation eases at a pace that is faster than we currently anticipate, and that reduction is expected to be sustained, the Reserve Bank will have room to become more accommodative," Rajan said.
Tata Motors and Tata Steel led 16 Sensex gainers while Maruti and Axis Bank led the 13 losers. GAIL closed unchanged.

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The 50-issue NSE Nifty eased 9.60 points, or 0.16 per cent, to close at 6,126.25.
"The indication that the rate increases are done with for now is welcoming. Rates are likely to fall over the course of next fiscal...," said Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities.
Overnight heavy selling by Foreign Institutional Investors (FIIs) also kept the market under pressure. FIIs sold shares worth Rs 1,334.21 crore yesterday, as per provisional data with stock exchanges.
Rise in European stocks at opening, short-covering after the recent heavy sell-off ahead of expiry of January contracts on Thursday also helped the recovery in the local equities, a broker said.
Global investors avoided heavy bets ahead of the two-day Federal Open Market Committee meet, which starts later today.

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First Published: Jan 28 2014 | 5:29 PM IST

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