Equity benchmarks Sensex and Nifty ended lower on Friday as the 25-bps rate cut – the first in nearly five years – failed to excite investors, who were expecting more measures from the central bank to boost liquidity. They were also not enthused by the moderate growth projections for the next fiscal and the ‘neutral’ stance taken by the monetary policy committee.
The Sensex declined 197.97 points, or 0.25%, to close at 77,860.19 amid extreme volatility of more than 800 points. The Nifty fell 43.40 points, or 0.18%, to 23,559.95. During intra-day trading, the Sensex and Nifty dropped 0.75% and 0.68%, respectively.
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“The lack of immediate liquidity-enhancing measures and the status quo on the stance disappointed the markets,” said Devarsh Vakil, head of prime research at HDFC Securities.
The broader indices were mixed, with the BSE midcap rising 0.13% while the BSE smallcap dropping 0.68%. The market breadth was negative, with 2,402 stocks declining, against 1,520 reporting gains. Investors’ wealth decreased by ₹1.03 lakh crore to ₹423.94 lakh crore.
“Since the rate cut was widely anticipated, investors found nothing particularly exciting in the comments of the new RBI governor. This led to a bout of profit taking in banking, oil & gas, FMCG and power stocks,” said Prashanth Tapse, senior VP (research) at Mehta Equities. Tapse added that third quarter earnings have been mixed to subdued, while relentless selling by foreign institutional investors (FIIs) has prompted investors to remain cautious.
Among rate-sensitive sectors, banking shares declined, while auto, realty and consumer durables stocks gained. The Nifty PSU Bank index fell 1.38%, making it the top sectoral loser on the NSE. The Bank Nifty was down 0.44%, while the Nifty Consumer Durables and Auto indices gained 0.97% and 0.69%, respectively.
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On the BSE, telecom, metal, and consumer durables were top sectoral gainers, rising up to 2.64%, while oil & gas, FMCG and energy shares post big losses, declining up to 1.31%.
FPIs sold shares worth ₹470.39 crore while domestic institutional investors offloaded equities worth ₹454.20 crore on Friday,
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