Business

Markets give thumbs down to RBI rate cut

Sensex yo-yoes to settle in the red

After three successive sessions of gains, the benchmark Sensex ended in the red on Friday even as the Reserve Bank of India announced a slew of measures to boost the economy, including significant cuts in key rates.

The Sensex, that surged by more than 1,100 points during the morning session, pared all its gains and closed at 29,815.59, down 131.18 points or 0.44%.

The broader Nifty settled at 8,660.25, up by a marginal 18.80 points or 0.22%.

Market participants were of the view that investors were disappointed since the central bank refrained from making any projections related to growth or inflation thereby raising more concerns on the potential hit to the economy due to COVID-19.

“The bleak outlook from the Reserve Bank of India brought the market down as investors booked profit after three days of rise,” said Vikas Jain, Senior Research Analyst, Reliance Securities.

“The uncertainty will keep the markets nervous and going ahead markets would now focus more on global cues and fresh news flow of COVID-19 pandemic,” added Mr Jain.

Meanwhile, the massive cuts in key rates along with a moratorium on loans announced by the RBI pushed up the banking and financial stocks during the first half of the session before selling pressure gripped the bourses.

Stocks like Axis Bank, IndusInd Bank, State Bank of India, ICICI Bank, Bajaj Finance, HDFC Bank and Kotak Mahindra Bank were among the top gainers in the morning session though some of these ended in the red as the session came to an end.

Interestingly, foreign portfolio investors were net buyers, but at a paltry ₹356 crore, on Friday after staying net sellers on almost all days in the recent past.The cumulative sales by foreign investors in the current month is pegged at a record ₹59,377 crore. The fall in the benchmark came even as most of the leading Asian equity indices rose. The Nikkei gained nearly 4% while Hang Seng also gained marginal ground.

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Printable version | Jun 5, 2020 12:20:28 PM | https://www.thehindu.com/business/markets-give-thumbs-down-to-rbi-rate-cut/article31186727.ece

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