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Sensex down 122 pts; banks drag post RBI policy, PNB Q3 nos

16:41

The News International Team

The market fell for the third consecutive session on Tuesday, weighed down by banking & financials stocks post RBI policy and PNB Q3 earnings.

The 30-share BSE Sensex managed to hold the 29000-mark amid selling pressure, down 122.13 points to 29000.14. The 50-share NSE Nifty slipped 40.85 points to 8756.55.

The broader markets declined too with the BSE Midcap and Smallcap indices falling 0.3 percent each. About 1324 shares advanced and 1542 shares declined on the Bombay Stock Exchange.

The Reserve Bank of India today kept repo rate (7.75 percent) and cash reserve ratio (4 percent) unchanged but cut statutory liquidity ratio by 50 basis points to 21.5 percent. Governor Raghuram Rajan says more data is awaited for further action on the rates front, adding the inflation is likely to be around 6 percent by January 2016.

Gautam Trivedi of Religare Capital Markets says he expects a rate cut post the Budget. The street is very cautious on banks as Q4 could be worse than Q3.

Bank Nifty played a key role in today’s fall, down 2.4 percent as RBI did not cut policy rates and Punjab National Bank disappointed street with Q3 earnings.

PNB was the top loser on Nifty, falling nearly 8 percent as asset quality worsened with gross NPAs close to 6 percent against 5.65 percent last quarter. Gauri Shankar, executive director of the public sector lender expects pain on asset quality to continue for another two quarters.

Axis Bank plunged 5 percent followed by HDFC, State Bank of India and Kotak Mahindra Bank with 2.5-3.4 percent loss. HDFC Bank and ICICI Bank were down 1.8 percent and 1.5 percent, respectively.

Auto stocks continued to decline for the second day post January sales numbers. Bajaj Auto and Mahindra & Mahindra lost over 3.5 percent. Hero Motocorp was down 0.8 percent ahead of earnings later today. Maruti Suzuki declined 1.7 percent on profit booking.

Tata Motors climbed 1.7 percent as CLSA has a buy rating on Tata Motors citing that it has potential for multiples to improve given that the auto major is entering a strong volume and earnings growth phase. The brokerage has a target price of Rs 740 per share and sees a 60 percent upside at Rs 950 in a two-year’s time once Jaguar Land Rover (JLR) new products have been launched.

Among others, Tata Power tanked 4 percent and Cipla was down 2.5 percent whereas Sesa Sterlite topped the buying list on Nifty, up more than 6 percent. ITC, TCS, Sun Pharma, NTPC and BHEL gained 1-1.7 percent.

ONGC surged 2.6 percent and Cairn India climbed 4 percent on rising crude oil prices.  Brent crude oil March futures rallied 3.2 percent to USD 56.48 a barrel and WTI crude gained 3 percent at USD 51 a barrel.

Reliance Industries was the major contributor to key indices’ gains, up 3.25 percent on spike in oil prices and payment bank licence news. Reliance applied for payments bank licence and SBI will hold up to 30 percent stake in payments bank JV.

Telecom operator Bharti Airtel rallied 3.4 percent ahead of Q3 earnings (on Wednesday). According to a CNBC-TV18 poll, Indian business performance is expected to be decent with Africa likely to remain sluggish during October-December quarter.

Global markets were mixed today. In Asia, Shanghai rose 2.5 percent whereas Nikkei lost 1.3 percent. European markets were strong at the time of closing of Indian equities. France’s CAC, Germany’s DAX and Britain’s FTSE traded more than 1 percent higher on spike in crude oil prices.

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