The Sensex and Nifty ended lower for a second consecutive session on Thursday as State Bank of India and other lenders extended losses on concerns about the likelihood of further monetary easing by the country's central bank.
The Reserve Bank of India had on Wednesday cut the repo rate by 25 basis points to 6 per cent, a more than 6-1/2 year low, but pinned future action on economic data, disappointing investors who had hoped for signs of more easing ahead.
Hopes of further rate cuts had risen after inflation eased while the economy is growing at its slowest pace in over two years.
A survey earlier on Thursday showed
“Bank stocks are down mostly because of lack of clarity from the RBI,” said Sudhakar Pattabiraman, head
The 30-share BSE index Sensex ended lower by 238.86 points or 0.74 per cent at 32,237.88 and the 50-share NSE index Nifty closed down 67.85 points or 0.67 per cent at 10,013.65.
Barring oil & gas and consumer durables, all other BSE sectoral indices ended lower. Among them, metal index fell the most by 1.68 per cent, followed by banking 1.66 per cent, healthcare 1.03 per cent and realty 0.73 per cent. On the other hand, oil & gas index was up 1.35 per cent and consumer durables 0.11 per cent.
Top five Sensex gainers were Bharti Airtel (+2.01%), Reliance (+1.38%), Bajaj Auto (+1.17%), Hero MotoCorp (+1.02%) and TCS (+0.9%), while the major losers were Lupin (-3.8%), Coal India (-3.36%), State Bank of India (-2.24%), Dr Reddy's (-2.02%) and Axis Bank (-2.01%).
“Bank stocks are down mostly because of lack of clarity from the RBI,” said Sudhakar Pattabiraman, head of research operations at William O'Neil India.
“Monsoon seems to be fine, rural fundamentals look strong now and if inflation is a little better than what it has been so far, the RBI would want to hold off on rate cuts for now,” he added.
Housing Development Finance Corp , down as much as 1.71 per cent, was the biggest drag on both indexes.
The Nifty PSU bank index fell as much as 2.2 per cent, marking a third consecutive session of losses.
State Bank of India fell as much as 2 per cent, Canara Bank Ltd lost as much as 2.8 per cent, while Punjab National Bank dropped nearly 4 per cent.
However, the Nifty pharma index gained as much as 1.2 per cent, after falling for eight sessions in the last 10, after a media report said the Indian government has proposed to waive clinical trials on proven drugs