Sensex trades flat as markets await interest cut by banks
Mumbai: A benchmark index for Indian equities markets was trading flat in the late afternoon trade Wednesday, a day after the Reserve Bank of India (RBI) cut key lending rates in its third quarterly review of monetary policy.
However, the most awaited event that has kept markets choppy is the extent to which a interest rate cut by banks will come to consumers. The decision on the cut will be discussed in the asset liability committee (ALCO) meeting of bankers Wednesday.
There was heavy buying in the interest rate sensitive consumer durables and banking stocks, while oil and gas stocks saw an upward trend after a subdued run in the past one week.
However, automobile, capital goods and fast moving consumer goods (FMCG) stocks came under selling pressure.
The 30-share Sensex, which opened at 20,014.80 points, was ruling at 20,008.84 points, up 17.94 points or 0.09 percent from its previous close at 19,990.90 points.
The RBI Tuesday cut the short-term lending rate to 7.75 percent after a gap of nine months, and reduced the Cash Reserve Ratio (CRR) to 4 percent -- which it hopes will translate into lowering of home, auto and corporate loans cost and improve liquidity in the system.
The Sensex touched an intra-day high of 20,073.46 points and a low of 19,965.23 points. The midcap index was up 7.98 points, while the smallcap index was lower by 6.18 points.
The wider 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) was trading up 8.80 points or 0.15 percent at 6,058.70 points.
Major indices were up - consumer durables index was up 131.19 points, followed by the bank index, up 78.34 points, and automobile index, up 77.47 points, and the oil and gas index, up 76.53 points.
The automobile index was down 57.30 points. And so were the capital goods index, down 42.74 points, and the FMCG index, down 26.26 points.
Among other Asian markets, Japan's Nikkei was up 2.28 percent, while Hong Kong's Hang Seng was higher by 0.81 percent. China's Shanghai Composite Index was trading up by 1.00 percent.