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Market cautious ahead of RBI policy, Sensex slips 57 points

Last Updated: Saturday, October 27, 2012 - 17:35

Mumbai: In a cautious approach ahead of the RBI's second quarter monetary policy review on October 30, the BSE benchmark Sensex ended lower by 57 points in the week under review on profit booking mainly in consumer goods, FMCG and realty counters.

Both stock exchanges, BSE and NSE, were closed for trading on October 24 on account of 'Dussehra'.

During the week, the market moved on either side in a narrow range in the backdrop of Q2 results, a broker said.

Selling was seen more in second-line stocks as retail investors preferred to book profits and decided to play safe ahead of the monetary policy review. As a result BSE-Smallcap and BSE-Midcap indices underperformed the 30-share Sensex.

Gains registered by M&M, L&T, ICICI Bank, TCS, HDFC Bank, Gail India, Hero MotoCorp and HDFC were offset by fall in shares of Jindal Steel, ITC, SBI, HUL, Tata Motors, NTPC, Infosys, Wipro, Tata Steel and Hindalco.

Profit-booking ahead of the expiry of Futures & Options (F&O) segment on October 25 too weighed on the market.

FMCG giant ITC tumbled after the Health and Family Welfare Ministry announced it has notified new symbolic health warnings to be shown on tobacco product packs from April 1, 2013. Consumer goods major HUL also dropped on Q2 earnings, which were below market expectations.

However, engineering and construction major L&T, top software services exporter TCS, financial powerhouse ICICI Bank and auto giant M&M attracted good buying support on strong their Q2 earnings.

The BSE moved in a range of 18,812.93 and 18,558.05 before concluding the week at 18,625.34, a fall of 56.97 points or 0.30 percent. Last week, it had gained 7.13 points or 0.04 percent.

The wide-based 50-issue S&P CNX Nifty of the NSE declined by 19.95 points, or 0.35 percent, to 5,664.30.

On the overseas front, reports of downgrading of credit ratings on five Spanish regions and also BNP Paribas SA and other 10 France banks by Standard & Poor's kept the market under pressure.

Concerns over slowing corporate earnings growth overseas and Europe's struggle to contain its debt crisis also weighed on the market, said analysts.

Back home, fresh offloading by FIIs too aided the downtrend. FIIs sold shares worth Rs 750.18 crore in last two days of the week, as per provisional data with the stock exchanges.

"Results calendar is coming to an end very soon. October series is over with Nifty futures holding over 5,700 due to process issues. November series started with lower side, giving a feel to market players that all is over and now Nifty will be back to 5,400.

"RBI meet on October 30 and the NMDC FPO may compel Government to weigh heavily on the apex bank for some action, may be a rate cut," Kishor Ostwal, CMD, CNI Research, said.

Analysts said that the future trend will dictate by the announcement of Reserve Bank of India's second quarter monetary policy review on October 30 and a likely reshuffle of the Union council of ministers.

Overall, 17 out of 30 sensex-based components closed with losses while others finished with gains.

Jindal Steel was the top loser from the Sensex pack with a fall of 5.22 percent followed by ITC (3.88 percent), NTPC (3.79 percent), SBI (3.70 percent), Tata Motors (2.77 percent), HUL (2.61 percent), Wipro (2.41 percent), Infosys (2.28 percent), Tata Steel (1.90 percent) Dr Reddy's Lab (1.88 percent), Hindalco (1.78 percent), ONGC (1.61 percent), Sun Pharma (1.42 percent) and Cipla (1.07 percent).

However, M&M firmed up by 6.83 percent, L&T by 4.48 percent, ICICI Bank by 2.13 percent, TCS by 1.81 percent, HDFC Bank by 1.42 percent, Hero MotoCorp by 1.07 percent and Gail India by 1 percent.

Among the sectoral indices, the BSE-CD dipped by 4.26 percent, BSE-FMCG by 3.01 percent, BSE-Realty by 2.38 percent, BSE-Power by 1.60 percent, BSE-PSU by 1.52 percent and BSE-Metal by 1.41 percent, while BSE-CG flared up by 2.34 percent.

The total turnover at BSE and NSE was low at Rs 8,418.95 crore and Rs 40,676.41 crore, respectively.


First Published: Saturday, October 27, 2012 - 10:33
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