Markets decline in early trade
The 30-share BSE Sensex fell 219.52 points to 65,468.66.The NSE Nifty declined 64.2 points to 19,478.90.
Published: 11th August 2023 10:31 AM | Last Updated: 11th August 2023 10:31 AM | A+A A-
National Stock Exchange (NSE) displayed outside the headquarters in Mumbai. (Photo | PTI)
MUMBAI: Benchmark equity indices declined in early trade on Friday, extending their previous day's weak momentum, amid a largely negative trend in Asian markets.
Trends in the domestic market remained weak post the RBI monetary policy and the unexpected announcement of reducing cash in the banking system.
The 30-share BSE Sensex fell 219.52 points to 65,468.66.The NSE Nifty declined 64.2 points to 19,478.90.
From the Sensex pack, JSW Steel, Hindustan Unilever, ICICI Bank, NTPC, IndusInd Bank, Tata Steel, ITC and Kotak Mahindra Bank were among the major laggards.
HCL Technologies, Power Grid, Tata Motors, Maruti, Titan and Wipro were among the gainers.
The Reserve Bank of India (RBI) on Thursday left its key interest rates unchanged for a third straight meeting but signalled tighter policy if food prices continue to drive inflation higher.
The hawkish stance was also reinforced by the unexpected announcement of reducing the cash in the banking system by raising the incremental cash reserve ratio (I-CRR) to 10 per cent on the incremental NDTL (net demand and time liabilities) over the last three months.
This will help in absorbing a large part of the excess liquidity created through the return of the Rs 2,000 notes and the large dividend to the government from RBI.
In Asian markets, Shanghai and Hong Kong were quoting lower while Seoul traded in the green.
The US markets ended with gains on Thursday.
"The only negative from the RBI's message yesterday is the hike in I- CRR to neutralise the excess liquidity created by the withdrawal of the Rs 2,000 notes.
The sentimental impact of this decision is unlikely to last long since it will not impact the banking sector's bottom line much since the NPAs of banks are coming down and the credit growth in the economy is good," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Foreign Institutional Investors (FIIs) were buyers on Thursday as they bought equities worth Rs 331.22 crore, according to exchange data.
"On the domestic front, post the monetary policy outcome, the focus will be on today's IIP numbers to be released after the market hours," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said.
Global oil benchmark Brent crude declined 0.02 per cent to USD 86.38 a barrel.
The BSE benchmark fell 307.63 points or 0.47 per cent to settle at 65,688.18 on Thursday. The Nifty declined 89.45 points or 0.46 per cent to end at 19,543.10.
