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India Stocks Review:Nifty 50 fails to hold 9700 even as IT cos surge


Mumbai: Even a surge in shares of information technology companies could not help the Nifty 50 sustain the 9700-point mark, as sentiment turned cautious ahead of the outcome of the Reserve Bank of India's monetary policy outcome on Wednesday.

The central bank's repo rate is likely to be left unchanged at 6.25% despite Consumer Price Index-based inflation at an all-time low, all the 35 economists, treasurers, and mutual fund managers polled by Cogencis said.

"While we are not expecting an outright cut in the June policy review, we certainly expect the apex bank to acknowledge a softer growth-inflation mix and hence foresee a dovish tilt in the monetary stance," brokerage Edelweiss Securities said in its report.

However, given that the central bank has typically been more hawkish than expected, investors chose to book profits, giving a breather to indices from their lifetime-high run.

The weakness in shares also reflected the losses in European equities, where investors exercised caution amid the recent rift among West Asian nations and ahead of the general election in the UK, and a European Central Bank meeting.

While the Nifty 50 and the Sensex tested fresh lifetime highs today, both ended 0.4% lower, led by weakness in shares of fast moving consumer goods, automobile and select energy companies.

While these sectors saw selling pressure, the technology space bucked the weak trend in the broader market.

The Nifty IT index was the best performer among sectoral indices, up more than 2%, led by a 1-4% jump in shares of Tata Consultancy Services, Infosys, Wipro, HCL Technologies and Tech Mahindra.

These companies, which together account for 15% weight on the Nifty 50, were the top five performers on the index.

CLSA Asia Pacific Markets is reportedly positive on TCS and HCL Technologies, which aided gains in these shares.

Bliss GVS Pharma was locked in a 20% lower circuit on market buzz that promoters have sold some shares in the company, while Nitin Fire Protection Industries and Shilpi Cable Technologies continued their weak run. Adani Enterprises, meanwhile, gained 9% on reports that the company has approved the final investment for the Carmichael coal mine project in Queensland, Australia.

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