Markets ended lower on Friday after the Reserve Bank of India (RBI) sprung a surprise and kept the repo rate unchanged at 6.50 per cent. Most experts had expected the central bank to hike rates by 25 bps.
The S&P BSE Sensex lost 792 points, or 2.25 per cent, to settle at 34,377 while the broader NSE’s Nifty50 index dropped 283 points, or 2.7 per cent, to close at 10,316. Among specific stocks, shares of oil marketing companies such as HPCL, BPCL and IOCL hit 52-week lows after the government announced that it will cut excise duties on petrol and diesel prices and OMCs will absorb Re 1 per litre.
Heavy losses were also visible in banking stocks with the Nifty Bank index slipping 1.5 per cent. YES Bank, State Bank of India (SBI), Bank of Baroda (BoB), IDFC Bank and ICICI Bank lost up to 5.1 per cent.
Earlier, the monetary policy committee (MPC) of the Reserve Bank on Friday kept the repo rate unchanged at 6.50 per cent in its fourth bi-monthly monetary policy review of 2018-19. The central bank changed the policy stance to ‘Calibrated tightening’ from ‘Neutral’. Calibrated tightening means rate will be maintained or hiked in this cycle.
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The benchmark indices ended positive on Friday after index heavyweight SBI rallied 6% post its September quarter numbers. Gains were, however, capped as refiners such as Reliance Industries tumbled after oil prices gained overnight and Tata Motors slipped after the auto major said its British unit faced intensifying competition.
Investors also took cues from the Goods & Services Tax (GST) Council meeting. The Council decided to trim the 28% slab to just 50 items, as against 227 items currently. High-end items, including automobiles, washing machine, refrigerator, sin goods like paan masala and cigar are among these 50 items. This is the biggest reduction seen since the GST implementation on July 1.
The S&P BSE Sensex ended at 33,314, up 63 points, while the broader Nifty50 was ruling at 10,321, up 12 points.
About 1,480 shares declined against 1,197 advancing shares on the BSE.
State Bank of India’s second quarter standalone profit missed analyst expectations, falling 37 percent year-on-year to Rs 1,581.55 crore from Rs 2,538.32 crore crore. Net interest income grew by 27.3 percent to Rs 18,585.9 crore from Rs 14,600.2 crore YoY, which was slightly higher than CNBC-TV18 poll estimates of Rs 19,088.7 crore. Gross NPAs were lower at 9.83 percent against 9.97 percent QoQ.
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Benchmark indices scuttled between gains and losses to finally settle the day marginally higher as 2-day GST Council meet ends where rates for various goods and services were decided.
The government today decided that most of the services would be taxed at the rate of 18% under the GST regime. Rates for more than 1,200 items under the GST were announced with products like hair oil, soaps and toothpaste down to 18% from 22-24%.
Earlier in the day, S&P BSE Sensex rose as much as 278 points to reach a fresh high of 30,712, surpassing its previous milestone of 30,691 hit on May 17 as FMCG surged on GST boost. The index has hit a new high for the fourth time in five sessions.
The S&P BSE Sensex settled at 30,465, up 30 points, while the broader Nifty50 ended at 9,427, down 1 point.
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