Interest rate sensitive stocks that were expecting a rate cut to boost buying sentiments fell on Wednesday as the Reserve Bank of India maintained the status quo in monetary policy.
The fall was across the board in banking, realty and auto sectors.
The BSE Bank Index settled at 20849.49, down 1.07% as Bank of Baroda dropped 2.71%, Bank of India fell 2.18%, Axis Bank fell 2% Punjab National Bank slipped 1.94% and State Bank of India fell 1.47%. ICICI Bank, Federal Bank and YES Bank fell 1.05%, 0.29% and 0.28% respectively.
Following the banking sector losses, the realty index ended the day at 1260.43 points, registering decline of 1.49%.
While NBCC wrapped up the day at Rs 231.85, down 1.05%, along with Unitech that remained unchanged from the previous closing price settling at Rs 4.70, Oberoi Realty gained 1.91%.
Additionally, the auto index ended at 20030.92, registering a marginal rise of 0.42%. Bajaj Auto being under the weather, witnessed a slump of 0.76% closing at Rs 2,707.30.
The apex bank’s lowering of the GDP projection at 7.1% for this fiscal from earlier estimate of 7.6% also weighed on the stocks.
The sectors are already hit by the acute cash crunch due to government-launched demonetization. In its surprising move that is the first after the government seized legal tender from Rs 500 and Rs 1,000 notes, RBI’s move took a toll on debt and equity, though hope glimmers for the forex market in the immediate term, experts are of the view.
The surprise move by the central bank of holding rates steady which is also being said to hurt bonds, could turn auto loans, home loans and corporate loans cheaper now that the central bank has held rates steady in Wednesday’s monetary policy meeting.
Meanwhile,the US Federal Reserve’s decision next week will be the chief determinant of local stock trends, and the stock prices could see a correction ahead of the Fedmeet next week, as per experts.
HOPES SLUMP
- The fall was across the board in banking, realty and auto sectors
- BSE Bank Index settled at 20849.49, down 1.07%
- Realty index ended the day at 1260.43 points, registering decline of 1.49%
- However, auto index registered a marginal rise of 0.42%
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