Indian equity benchmarks continued their downward journey on Wednesday as well - amid a choppy trade. Capital goods and banking (major ones) stocks remained on sellers' radar. Heavyweight Reliance Industries too added pressure in the late trade again.
It seemed that the yesterday's rate hike is still lingering on the market today. Dilip Bhat, Joint MD of Prabhudas Lilladher said the market perhaps would start testing the lower levels.
"The way the interest rates have been hiked, clearly suggests that couple of things are pretty serious with all the resources at their command (RBI). Secondly he (RBI Governor) is going to tame the inflation even if it means disrupting the growth. I think both the scenarios are not very comforting for the markets. My feeling is even if the inflation has peaked out, but if it remains at those elevated levels, markets still will not be comfortable. So even if market wants to go up higher, I don’t think there will be enough comfort that whether the higher levels are to be backed up by either earnings growth or a GDP growth or by PE rerating," he explained.
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