Markets pare losses in afternoon trade, but close in negative ahead of RBI’s policy meeting
A contraction in the services sector in November and a cut in Fitch Ratings’ GDP forecast also weighed on the market sentiment.
India’s benchmark indices declined on Tuesday in response to a contraction in the services sector in November and a drop in the economic growth forecast by Fitch Ratings.
Traders were also cautious in making new transactions ahead of the Reserve Bank of India’s two-day monetary policy meeting, which began on Tuesday. The central bank decides key interest rates during these meetings.
The BSE Sensex fell 67.28 points to 32,802.44, and the NSE Nifty 50 closed 9.50 points down at 10,118.25. Both indices trimmed losses in the afternoon session but ended in the negative.
The monthly Purchasing Managers’ Index for the services sector, released by IHS Markit, was at 48.5 in November, declining for the first time in three months. A reading below 50 indicates contraction in economic activity.
Fitch Ratings also further trimmed its forecast for India’s economic growth in 2017-’18 to 6.7% from its earlier projection of 6.9%, citing a weaker-than-expected rebound in GDP data for July-September.
The top stocks on the BSE Sensex were State Bank of India, Bharti Airtel, Reliance Industries, Sun Pharmaceuticals and ICICI Bank. The top losers were Hero Motocorp, Wipro, Tata Steel, NTPC and Dr Reddy’s Laboratories.
The best performers on the Nifty 50 were Bajaj Finance, Yes Bank, State Bank of India, Reliance Industries and Bharti Airtel. The stocks that lost the most were Hero Motocorp, Wipro, ONGC, Tata Steel and UPL.
The Indian rupee was trading flat at 64.38 to the United States dollar at 4.20 pm.
All other major Asian markets also closed in negative on Tuesday. The Hong Kong Hang Seng fell 295.48 (1.01%). The Taiwan TSEC 50 Index and Japan’s Nikkei both fell 84 points, and the Shanghai index closed nearly six points below.