Sensex’s four-day winning streak halted, ends 115 pts lower; mid & small-cap indices outperform

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Reversing the four session winning streak, key domestic equity benchmark indices took a breather on Tuesday, as investors resorted to profit-taking in IT and oil & gas shares even as banking scrips bucked the trend after the RBI governor hinted at a rate cut in the next policy meeting on condition retail inflation doesn’t show upward trajectory.

The 30-share BSE S&P Sensex ended the session at 28,071.93, down 115.13 points, or 0.4 percent lower from previous close. Earlier, the index plunged to the day’s low of 27,866.12, down 321 points, before erasing some of its losses towards the fag-end. In the last four sessions, the benchmark index gained 728 points tracking steady global markets trend and impressive earnings performance from select domestic blue-chip firms.

The broader 50-scrip CNX Nifty ended at 8,516.90, down 26.15 points, or 0.3 percent lower.

In a market that exhibited sharp intra-day volatility, the broad market sentiment, however, displayed positive trend as traders continued to lap up mid and small-cap shares, thereby pushing BSE Mid and Small-cap indices to their new 1-year highs.

Extending the strong performance, the BSE Mid-cap index, after scaling to a new 52-week high of 11,467.48 intra-day, finally ended 1.1 percent higher at 11,457.23. Similarly, the BSE Small-cap index also hit a new 1-year high of 12,026.06 before trimming some gains to end 0.7 percent higher at 12,021.14.

Even the market breadth ended positive with 1,622 stocks advancing against 1,268 declines on BSE.

Among the Sensex laggards, shares of HeroMoto Corp declined 2.7 percent to Rs 2,624.25, GAIL eased 2.5 percent to Rs 345.10, ONGC fell 2.4 percent to Rs 266.90, Wipro lost 2.1 percent to Rs 558.20 and Infosys was down 1.8 percent at Rs 1,059.80.

Others such as Reliance Industries, HDFC, Bharti Airtel, Lupin and ITC were down around 1-1.3 percent.

On the other hand, banking shares, which exhibited volatility in intra-day trade ended higher even as the RBI governor kept key repo rate unchanged at 7.25 percent.

In his credit policy speech, RBI Governor Raghuram Rajan made it amply clear that the central bank would watch the food prices closely in the next few months, before making up his mind on another rate move. “They (food prices) will have to be carefully monitored as they tend to be sticky and impart an upward bias to inflation and inflation expectations,” said Rajan.

Among the banking stocks, shares of Bank of Baroda jumped 3.5 percent to Rs 191.05, SBI rose 2.5 percent to Rs 288.20 and PNB added 2.5 percent to Rs 159. Private banking shares such as YES Bank, Axis Bank, ICICI Bank and Kotak Bank also edged higher.

Metal stocks were the star performers with BSE Metal index outperforming the sectoral pack, ending 2.7 percent higher at 8,805.33. Among the gainers, shares of Nalco surged 6.4 percent to Rs 37.25, JSW Steel flared up 5.6 percent to Rs 880.75, SAIL surged 4.3 percent to Rs 59.05, Tata Steel advanced 3.4 percent to Rs 256.40 and Hindalco was up 3.4 percent at Rs 109.30.

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