18th March, 2013 : Mkt cautious ahead of Cyprus vote, RBI policy
The India equity market joined the global sell off. Market participants also remained jittery ahead of the RBI policy meet scheduled to be held tomorrow.
“RBI is likely to cut the repo rate by 25bps considering sustained moderation in core inflation, non-populist Budget showcasing commitment to fiscal consolidation and sharp slowdown in GDP growth to decade-low levels. A CRR cut is unlikely given that liquidity conditions could ease post April; also the ratio was lowered in January policy in anticipation of the year-end liquidity stress,” says Amar Ambani, Head of Research, IIFL.
The Euro zone struck a deal to hand Cyprus a bailout worth 10bn euro, but demanded depositors in its banks forfeit some money to avoid bankruptcy. Cyprus is the fifth in line after Greece, Ireland, Portugal and Spain to run to the Euro zone for financial aid. Euro zone ministers forced Cyprus’ savers, to pay up to 10% of their deposits to raise almost euro 6bn.
Coming back to the domestic market, after opening gap down, market remained under pressure throughout the day. The S&P BSE Metal index led the decline; the index was down 2.3%, followed by S&P BSE PSU index down 1.6%. Among the other major laggards were the S&P BSE Auto index down 1.4% and S&P BSE Realty index was down 1.2%.
Among the top gainers were the S&P BSE 0.7%, Consumer Durables index 0.3% and Healthcare index up 0.3%.
Even the S&P BSE Mid-Cap and Small-Cap index was down 0.29% and 0.67% respectively.
Finally, BSE Sensex closed at 19293, down 134 points over the previous close. It had earlier touched a day’s high of 19345 and a day’s low of 19232. It opened at 19282.
The NSE Nifty closed at 5,835, down 37 points over the previous close. It earlier touched a day’s high of 5,850 and a day’s low of 5,814. It opened at 5,816.
RIL, Wipro, Coal India, Gail India, ICICI Bank, ONGC, Dr Reddy’s Lab, Tata Motors, SBI, ITC, L&T, HDFC were losers in Sensex and Nifty.
Hindustan Unilever, HDFC Bank, Hero Motocorp, Cipla, Sun Pharma were among gainers in Sensex and Nifty.
The advance decline ratio was in favour of bears. 1752 stocks declined against 1097 advancing stocks, while 120 stocks remained unchanged.
The INDIA VIX was up 5% to close at 15.85. It hit a day’s high of 16.59 and day’s low of 15.16.
Stocks which hit 52-week high during the week were Satyam Comp, MGF, Blue Blend India, Dhanleela Inv and Modipon.
Stocks which hit 52-week low during the week were ABB, Force Motors, BEML, Bihar Sponge and Chennai Petro.
Most of the Asia markets ended with losses on Monday as they reacted badly on plans of an unprecedented levy on private bank deposits in Cyprus in exchange for a financial bailout.
The Hang Seng index in Hong was down 2%, the Shanghai Composite index in China declined by 1.7%, the Nikkei index in Japan was down 2.8%, the Straits Times index ended lower by 0.9%, the Kospi index in South Korea fell by 1% and the Taiwan index fell 1.5%.
The European markets also were trading lower as bailout foe Cyprus issue haunts stocks across Europe. The FTSE index in UK was down 0.7%, the CAC index in France was down 1% and the DAX index in Germany declined by 1%.
On the currency front, the euro sank against the dollar on Monday on Cyprus bailout news. The euro dropped to US$1.2891 in Asian trade on Monday, down sharply from US$1.3076.
Crude-oil futures plunged in electronic trading on Monday, by a surge in the dollar as worries spiked over a Cyprus bank levy and its implications for Europe. Crude oil for April delivery plunged US$1.04, or 1.1%, to US$92.41 per barrel.