Nifty ends flat as RBI keeps lending rates unchanged

Indian equities markets on Wednesday closed on a flat note, after the Reserve Bank of India (RBI) kept key lending rates unchanged in its sixth and final monetary policy review for the 2016-17 fiscal.

Besides, mixed global cues and outflow of foreign funds subdued investors’ sentiments.

The key indices — which fell by around half a per cent immediately after the announcement by the central bank at 2.30 p.m. — recovered soon after and finally closed flat.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) inched up by 0.75 points or 0.01 per cent to 8,769.05 points.

In contrast, the barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,386.08 points, closed at 28,289.92 points — down 45.24 points or 0.16 per cent, from the previous close at 28,335.16 points.

The Sensex touched a high of 28,391.64 points and a low of 28,149.08 points during intra-day trade.

However, the BSE market breadth was tilted in favour of the bulls — with 1,486 advances and 1,381 declines.

Moreover, the broader markets outperformed the headine indices. The BSE mid-cap index rose by 0.51 per cent, while the BSE small-cap index edged up by 0.22 per cent.

On Tuesday, the benchmark indices were dragged lower by negative global cues.

The NSE Nifty had inched down 32.75 points or 0.37 per cent to 8,768.30 points, while the BSE Sensex was down 104.12 points or 0.37 per cent at 28,335.16 points.

Deepak Jasani, Head – Retail Research, HDFC Securities, said: “Markets ended flat on Wednesday after witnessing a volatile session on the back of the RBI monetary policy.”

“Though the markets were initially disappointed with the unanimous decision of the Monetary Policy Committee to keep interest rates on hold and to change its stance from accommodative to neutral, the markets bounced back after the initial sell-off,” Jasani said.

“Major Asian markets have ended on a mixed note. European indices like FTSE 100, CAC 40 and DAX traded higher.”

According to Vijay Singhania, founder and Director of brokerage firm Trade Smart Online, the change in the RBI’s stance from accommodative to neutral spooked the markets more than not cutting interest rates.

“A sticky inflation at the non-food and non-oil level has acted as one of the main reasons for RBI to maintain its interest rates,” Singhania pointed out.

Nevertheless, the Indian rupee appreciated by 22 paise to 67.19 against a US dollar from its previous close of 67.41 to a greenback.

“Volatility in USD/INR futures prices also brought volatility in Indian equities markets,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

“IT stocks traded with volatile sentiments, while banking, pharma, auto and FMCG stocks traded with selling pressure.”

In terms of investments, the provisional data with exchanges showed that foreign institutional investors (FIIs) sold stocks worth Rs 127.69 crore, while the domestic institutional investors (DIIs) divested scrip worth Rs 166.82 crore.

Sector-wise, the S&P BSE banking index declined by 86.42 points, followed by the healthcare index, which slipped by 39.51 points, and the FMCG index, which fell by 35.18 points.

On the other hand, the S&P BSE consumer durables index augmented by 371.84 points, the automobile index surged by 150.88 points, and the metal index rose by 101.93 points.

Major Sensex gainers on Wednesday were: Coal India, up 1.95 per cent at Rs 321.75; Gail, up 1.71 per cent at Rs 484.50; Mahindra and Mahindra (M&M), up 1.57 per cent at Rs 1,278.45; Lupin, up 1.31 per cent at Rs 1,487.70; and Tata Motors, up 1.22 per cent at Rs 513.

Major Sensex losers were: Dr Reddy’s Lab, down 1.40 per cent at Rs 3,021.20; Sun Pharma, down 1.08 per cent at Rs 662.30; Hero MotoCorp, down 1.07 per cent at Rs 3,223.80; Axis Bank, down 1.04 per cent at Rs 487.50; and Infosys, down 0.88 per cent at Rs 936.45.

In the cash segment FIIs were net sellers to the tune of Rs 128 crores and DIIs net sellers to the tune of  Rs  167 crores.

FII positions in Index puts, futures and calls.

Nifty Put Call Ratio (PCR) data shows support at 8700 and resistance at 8800

(With agency inputs)