Indian shares drift lower after interest rate freeze


New Delhi : Indian equities ended lower Wednesday, a day after the quarterly review of the monetary and credit policy by the Reserve Bank of India (RBI), as sentiments were dampened by the status quo on interest rates.

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After losing 60.84 points or 0.34 percent Tuesday, the 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) Wednesday opened at 18,120.22 points, compared with the previous day’s close at 18,091.94 points.

Amid high volatility, the index closed the day at 17,758.64 points, with a loss of 333.3 points, or 1.84 percent, in line with the weak showing in other markets across Asia.

Only 56 scrips in the ‘A’ group, which are among the most actively traded in the bourse, ended in the positive territory, while 162 others ended with losses. In the Sensex basket, too, those that advanced outnumbered the losers 21:8.

Data with the Mumbai exchange showed that mid-cap and small-cap stocks dipped more than the Sensex, with the index for these two segments down 2.40 percent and 2.22 percent, respectively.

In fact, all the 13 sector-specific indices closed in the negative territory, led by that for oil and gas, down 4.45 percent, followed by 2.88 percent fall for power and 2.73 for consumer durables.

Bharat Heavy Electricals led the scrips that gained within the Sensex, up 1.82 percent at Rs.2,089.25, followed by Housing Development Finance Corp, up 1.53 percent at Rs.2,894.05 and Tata Steel, up 1.02 percent at Rs.723.30.

The losers were led by Reliance Industries, down 5.44 percent at Rs.1,992.30, followed by Hindustan Unilever, down 5.14 percent at Rs.196.60 and Oil and Natural Gas Corp, down 4.94 percent at Rs.968.50.

In Tuesday’s policy review, the central bank left unchanged its benchmark bank rate, the reverse repo rate, the repo rate and cash reserve ratio (CRR) in a bid to manage liquidity and keep inflationary expectations under check.

While the bank rate is currently pegged at 6 percent, the reverse repo rate and the repo rate have been notified at 6 percent and 7.75 percent, respectively. The cash reserve ratio stands at 7.5 percent.

Other Asian markets also turned volatile Wednesday, after expecting another rate cut by the US Federal Reserve after it surprised the financial markets last week by announcing a 75 basis point reduction in interest rates.