The Indian markets tumbled on Tuesday after the Reserve Bank of India took its first step toward tightening of the monetary policy. Banking and realty stocks were among the worst hit after the central bank tightened norms for these sectors. The Sensex fell 387 points to 16,353 while Nifty slipped 124 points to finish at 4,846. Market watchers said the correction was long due. Bharat Sheth, president of institutional sales at Techno Shares and Stock Broking, said, “The expectations that were built-up for second quarter results have been disappointing. The reaction was long due.” Upendra Kulkarni, director & CEO of Fortress Financial Services, said investors with a long-term view can take advantage of these corrections which were long due to pick up good quality stocks. The Reserve Bank of India in its second quarter review has left key rates unchanged. But it signaled a move toward a tighter monetary policy by hiking the statutory liquidity ratio and increasing the provisioning norms for advances to commercial real estate sector and tightening non-performing asset norms for banks. The RBI also withdrew some refinance facilities provided to banks with immediate effect. The central bank also discontinued banks’ special financing to mutual funds, NBFCs and housing finance companies. Realty, metal and banking stocks were hammered in today’s trade. The realty index on the BSE plunged 6.3 per cent. Omaxe, HDIL and Unitech plummeted over 7-9 per cent each. The BSE metal index fell 5.8 per cent amid a correction in commodity prices across the globe. The banking index lost 3.5 per cent. In the metal space, Sesa Goa dropped 12 per cent while Tata Steel and Hindalco lost over 7 per cent each. Among the banking stocks, ICICI Bank fell 4.4 per cent while SBI felll over 6 per cent. In global markets, Asian stocks retreated on Tuesday, following losses on Wall Street amid rising concerns the markets have gotten ahead of economic realities. European markets gained modestly. Major Asian markets dropped by around 2 per cent or more, with shares in resource companies hit after a steep fall in commodity prices overnight. Oil recovered only modestly to trade near $79 a barrel, while the dollar was slightly weaker against the yen and euro following a sharp rise.
0 comments:
Post a Comment