Stock Markets Fell For 2nd Day In A Row, Owing To Losses In Private Banks And Unfavorable Global Trends

The Benchmark equity indices Sensex and Nifty fell for the second day in a row on Friday, owing to losses at HDFC Bank and ICICI Bank, as well as a negative trend in Asian and European markets.

The domestic market trend remained negative following the RBI’s monetary policy and the unexpected announcement of reducing cash in the banking sector.

The 30-share BSE Sensex dropped 365.53 points or 0.56 percent to 65,322.65. It fell 413.57 points or 0.62 percent to 65,274.61 during the day.

The NSE Nifty fell 114.80 points or 0.59 percent to 19,428.30.

Among the main laggards on the Sensex were IndusInd Bank, NTPC, Asian Paints, Hindustan Unilever, JSW Steel, Tech Mahindra, Bajaj Finance, Infosys, Wipro, ICICI Bank, Bajaj Finserv, HDFC Bank and Tata Motors.

Gainers included HCL Technologies, Power Grid, Titan, Reliance Industries, UltraTech Cement, Tata Steel, State Bank of India, and Mahindra & Mahindra.

The Reserve Bank of India (RBI) maintained key interest rates steady for a third straight meeting on Thursday but signaled tighter policy if food prices continue to drive inflation higher.

The surprise announcement of reducing the cash in the banking system by raising the incremental cash reserve ratio (I-CRR) to 10 percent on the incremental NDTL (net demand and time liabilities) over the last three months bolstered the hawkish position.

This would assist in absorbing a significant portion of the surplus liquidity created by the repatriation of the Rs 2,000 notes and the huge dividend paid to the government by the RBI.

In Asian markets, Seoul, Shanghai, and Hong Kong all concluded down.

European markets were trading in the red.

On Thursday, the US markets ended with gains.

According to the exchange data, Foreign institutional investors (FIIs) acquired securities worth Rs 331.22 crore on Thursday.

Brent crude slipped 0.57 percent to USD 85.91 a barrel.

On Thursday, the BSE benchmark slid 307.63 points or 0.47 percent to end at 65,688.18. The Nifty fell 89.45 points or 0.46 percent to close at 19,543.10.

Also read: Nifty Closes Below 19,545; Sensex Falls 308 Points