Sensex ends 434 points lower as RBI cuts GDP forecast; banks slip
A 25 basis point (bps)-rate cut by the Reserve Bank of India (RBI) on Friday failed to cheer market participants as concerns over slowing economic growth dented investor sentiment. In its fourth bi-monthly monetary policy meet, the RBI’s monetary policy committee (MPC) did cut the repo rate, as widely expected; however, a sharp reduction in the GDP growth forecast to 6.1 per cent for the financial year 2019-20 (FY20) caught investors off guard.
Benchmark indices, S&P BSE Sensex and NSE’s Nifty50, lost over 1 per cent, thus taking their losing streak to the fifth consecutive session.
The S&P BSE Sensex dropped 434 points or 1.14 per cent to settle at 37,673.31. Financial stocks led the decline with HDFC Bank, ICICI Bank, and Axis Bank falling up to over 3 per cent.
On the NSE, the frontline index Nifty50 ended at 11,175, down 139 points or 1.23 per cent.
On a weekly basis, Sensex shed nearly 3 per cent while Nifty50 lost 2.93 per cent.
On the sectoral front, Nifty Bank index slid nearly 700 points or 2.40 per cent to settle at 27,731.85 levels, with 10 out of 12 constituents ending in the red. Nifty IT index was the only sectoral index on the NSE that ended in the green. The Nifty IT index ended at 15,340.30, up 62 points or 0.41 per cent.
In the broader market, the S&P BSE MidCap index lost 131 points or 0.94 per cent to settle at 13,713.79 levels, while the S&P BSE SmallCap index closed at 12,809, down 102 points or 0.79 per cent.
Aavas Financiers hit a new high after RBI hikes lending limit for NBFC-MFIs. In the past two weeks, the stock has rallied 13 per cent, as compared to a 0.38 per cent decline in the benchmark S&P BSE Sensex. On September 16, 2019, Aavas had received an investment of Rs 345 crore from IFC, a member of the World Bank Group, through issuance of non-convertible debentures (NCDs). The company said it will use the proceeds to grow its affordable housing finance program in the rural and semi-urban areas of Rajasthan, and neighbouring areas.
Shares of Info Edge (India) surged for the third straight day, up 6 per cent intra-day today, to hit a two-month high of Rs 2,242 on the BSE on Friday after the company invested Rs 6 crore in Happily Unmarried Marketing through its wholly-owned subsidiary.
Shares of Lakshmi Vilas Bank (LVB) were locked in the 5 per cent lower circuit band for the fifth consecutive trading day at Rs 29.85 on the BSE, after the Reserve Bank of India (RBI) initiated prompt corrective action (PCA) against the bank. This stock was quoting at nearly a decade low on the exchange. The stock of the private lender was trading close to its all-time low price of Rs 26.08 touched on March 4, 2009. In the past five trading days, it has tanked 22 per cent, as compared to a 2 per cent decline in the S&P BSE Sensex.
Here are some picks from the week gone by.
