A surprise rate cut by RBI on Wednesday powered the Sensex to cross the historic 30,000 mark but sustained selling across sectors dragged down the benchmark by a sharp 213 points at close, snapping a four-day Budget rally.
It was a memorable moment for the India markets as both the indices the BSE Sensex and the NSE Nifty conquered the 30,000 and 9,100 milestone respectively in early trade as RBI Governor Raghuram Rajan surprised the street for the second time in two months by cutting the benchmark interest rate by 0.25 per cent in an out—of—turn policy action.
However, the initial excitement proved to be short—lived as investors, both domestic and foreign, started booking profits after the 850—point rally in previous four sessions.
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Major laggards in Sensex included Sesa Sterlite, Hindalco, Tata Power, Axis Bank, SBI, M&M, Coal India and Wipro.
Banking, metal, power and auto shares faced the brunt.
The Sensex, which logged its all—time high of 30,024.74 within minutes of opening, fell to the day’s low of 29,289.05 in the last 90 minutes of trading before closing at 29,380.73 —— down a hefty 213 points or 0.72 per cent.
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The Sensex’s previous life high of 29,844.16 was hit on January 30 but it had fallen 499 points at close on that day.
“A rate cut before the scheduled meeting in April 2015 is an unambiguous signal to the markets that it is satisfied with the government’s commitment to medium—term fiscal consolidation plan,” said Ajay Bodke, Head — Investment Strategy & Advisory, Prabhudas Lilladher Pvt Ltd.
The 50—share NSE Nifty also made a new high 9,119.20, surpassing its previous intra—day high of 9,008.40 hit yesterday. However, the emergence of profit—booking at record levels dragged the index down by 73.60 points, 0.82 per cent down, to 8,922.65 at closing bell.
In the 30—share Sensex pack, 24 scrips ended with sharp cut while the remaining six counters finished in the green.
The total market breadth turned weak as 1,887 stocks declined, 1,003 advanced while 118 unchanged.
Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 772.92 crore yesterday, as per provisional data from stock exchanges.
Elsewhere in the region, most equities ended in red tracking overnight selloff in US stocks.