Indian shares ended broadly unchanged, as hopes the central bank would cut interest rates this week lifted some rate-sensitive firms, but Sun Pharmaceutical Industries slumped after posting disappointing earnings. The Reserve Bank of India is due to hold its policy review on Tuesday and most analysts expect the central bank to ease rates by 25 basis points after cutting rates by the same amount in January and again in March.
Rate-sensitive firms were among the day's gainers, with Housing Development Finance Corp ending up 1 percent. However, Sun Pharma fell 9.2 percent to its lowest since Feb. 27 after posting January-March earnings that were well below forecasts. The benchmark BSE index ended up 0.07 percent at 27,848.99 points after earlier gaining as much as 0.5 percent.
The broader NSE index ended flat at 8,433.40 points. Traders will also look for any RBI action to ease liquidity, given bankers have blamed tight cash conditions as a key reason that is preventing them from lowering lending rates and transmitting monetary policy to the broader economy. A rate cut is expected despite data on Friday showing the economy grew an annualised 7.5 percent in the January-March quarter - faster than in China - amid widespread scepticism about the methodology used to calculate the data.
"A 25 basis point rate cut is already priced in by a large section of the market," said Gaurang Shah, vice-president, Geojit BNP Paribas. "Rate cut benefits are not looking visible on the end consumer segment or corporates." Rate-sensitive firms were among the leading gainers, with State Bank of India up 0.68 percent, while Housing Development Finance Corp was higher 1 percent. But Sun Pharmaceutical Industries Ltd slumped as much as 10 percent to its lowest since Feb. 27 after posting January-March earnings that were well below forecasts.
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