The market Tuesday snapped its four-day winning streak driven by the Union Budget, as investors turned cautious ahead of the outcome of the two-day monetary policy committee meeting due Wednesday.
The 30-share BSE Sensex fell 104.12 points to 28335.16 and the 50-share NSE Nifty declined 32.75 points to 8768.30 on profit booking after rising 2.8 percent each in previous four consecutive sessions.
Experts expect consolidation to continue on Wednesday as the market seems to have priced in rate cut that is likely in forthcoming monetary policy on February 28.
“Investors are stepping back due to the uncertainty over FOMC rate hike, US policies and rising crude price which could impact inflation and rupee movement which consequently cast a shadow over the future RBI decision, Vinod Nair of Geojit BNP Paribas says.
Edelweiss expects the Reserve Bank of India to cut repo rate by 25 basis points to 6 percent from 6.25 percent.
“The domestic macroeconomic backdrop remains one of benign inflation, continued fiscal consolidation and sustained weakness in private capex. At the global level, though uncertainty persists, the situation still offers space as Federal Reserve is not in a hurry to raise rates immediately and the USD is showing a weakening bias. Moreover, the INR is also overvalued. This backdrop warrants a 25bps rate cut,” the research firm reasons.
The broader markets also closed moderately lower on negative breadth but outperformed benchmarks. About 1562 shares declined against 1330 advancing shares on the BSE.
Nifty PSU Bank gained half a percent after stable earnings and improvement in asset quality of Punjab National Bank, the country’s third largest public sector lender by market capitalisation. PNB shares gained 1.44 percent. SBI (up 0.16 percent) and Bank of Baroda (up 1.5 percent) will announce their quarterly earnings on February 10.
ITC closed off day’s high on profit booking, up 0.25 percent. The stock rallied 5.6 percent intraday to hit a record high of Rs 291.95 after the government through SUUTI sold 2 percent stake in the company via block deals. SUUTI held 11.12 percent stake in the company as of December 2016.
BHEL shares spiked 5.5 percent after better-than-expected earnings in Q3, though outstanding orderbook fell below Rs 1 lakh crore mark. The state-run power equipment maker reported profit at Rs 93.5 crore on strong operational performance.
Tata Motors fell 3.5 percent on sluggish retail sales growth by Jaguar Land Rover. JLR retail sales in January grew by 4 percent to 47,693 units YoY.
Maruti Suzuki gained 0.9 percent. Japanese automakers Toyota and Suzuki (parent company of Maruti) decided to work together in areas of environmental, safety and information technologies, and mutual supply of products and components.
Infosys was up 1.1 percent as sources told CNBC-TV18 that the management may consider the option of a share buyback. The size of share buyback could be a mammoth Rs 12,000 crore.
Tata Steel closed flat ahead of earnings due later today.
ICICI Bank, HDFC Bank and Axis Bank were down 0.5-0.9 percent on profit booking. ONGC lost nearly 3 percent while L&T gained a percent.
Amtek Auto shares gained 11 percent after sources told CNBC-TV18 that the auto ancillary company is expected to close asset monetisation deals by March 2017 and is likely to raise USD 1 billion via asset monetisation that may result in debt reduction of Rs 6,000-7,000 crore. Neumayer Tekfor, which Amtek acquired in 2013, is set to contribute the largest portion of the asset monetisation plan, sources say.
Ceat fell 2.5 percent after weak earnings. Profit in Q3 declined 25 percent to Rs 83.8 crore and operating profit margin contracted by 280 basis points to 9.8 percent year-on-year.
IDBI Bank was down 2 percent after loss in Q3 widened to Rs 2,255 crore from Rs 2,184 crore in same quarter last year. Higher non-performing assets & provisions and lower net interest income & operating profit impacted profitability of the bank.
MRPL shares surged 4 percent as profit increased 36 percent and operating profit grew by 46 percent year-on-year.