Indian stocks ended their four-session winning streak on Tuesday, with IT stocks leading the decline as investors turned cautious after the central bank left key rates unchanged. The BSE index ended 0.41 percent lower, while the NSE index shed 0.31 percent. The central bank said government economic reforms and the timing of any increase in US interest rates would be key factors that will determine whether it cuts rates for a fourth time this year.
"According to me, they are going too cautiously. The RBI is driven by data and not other factors, which suggest that the economy could possibly go into the fast track if they bring down the rate of interest," said Deven Choksey, managing director, KR Choksey Securities. Most traders said there is scope for at least another 25 basis point cut in the 2015 calendar year, with the trajectory of oil prices, progress of the monsoon and any interest rate hike by the US Fed acting as triggers.
The BSE index was down 1.12 percent and the NSE index was lower 1.07 percent, heading for their biggest single-day percentage loss since July 27. Financial stocks such as Housing Development Finance Corp and IT stocks including Infosys weighed heavily on the NSE index. Housing Development Finance Corp fell 1.7 percent, HDFC Bank dropped 0.6 percent, IndusInd Bank lost 2.8 percent, and ICICI Bank declined 0.3 percent. Infosys dropped 2.4 percent.
Oil refiners declined after global prices plunged on Monday as worries of oversupply and a weakening economic outlook, especially in Asia, prompted analysts to warn of further falls. Reliance Industries, ONGC and GAIL fell more than 2 percent each. Bluechips like ITC dropped 2 percent, while Tata Motors was down 2.4 percent.
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