Today's Result

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	AP Paper Mills  04-May-2011
	BKV Industries  04-May-2011
	Brigade Enterp  04-May-2011
	Broadcast  04-May-2011
	Dai-Ichi Karkar  04-May-2011
	Essel Propack  04-May-2011
	Hero Honda  04-May-2011
	Kennametal  04-May-2011
	Nandan Exim  04-May-2011
	Narbada Gems  04-May-2011
	NELCO  04-May-2011
	Nitco  04-May-2011
	PNB  04-May-2011
	Rexnord Electro  04-May-2011
	Sadhana Nitro  04-May-2011
	Singer India  04-May-2011
	Sterling Holida  04-May-2011
	Store One  04-May-2011
	Surat Textile  04-May-2011
	Technocraft Ind  04-May-2011
	Teledata Tech  04-May-2011
	Torrent Power  04-May-2011
	TTK Prestige  04-May-2011
	Universal Starc  04-May-2011
	Wintac  04-May-2011

Equity Slipped In Opening Trade

Equity slipped further in opening trade on Wednesday, with the Nifty beginning the trade below 5550 level. Auto, cement, private banking and technology companies' shares were seeing further correction. Weak Asian cues too weighted on Indian equities.

Some negative sentiment of 50 basis points hike in key rates by RBI yesterday and increased in savings bank rate to 4% from 3.5% is still weighed on the market. Especially rate sensitives were taking beating.

Among frontliners, Bajaj Auto, M&;M, Hero Honda, Maruti Suzuki, ICICI Bank, PNB, Axis Bank, HDFC Bank, Reliance Capital, Infosys, TCS, HCL Tech, Jaiprakash Associates, Hindalco, Sesa Goa, Sterlite Industries and ACC were pulling the markets down.

RBI's aggressive stand

The Reserve Bank of India on Tuesday raised its repo and reverse repo rates by 50 basis points each in a bid to control mounting inflation, while lowering the economic growth projection to 8% for the current fiscal.

FIIs were taken aback to see a greater-than-expected hike in the interest rates as there were concerns that it may affect India's investment cycle. Jim Walker, managing director of Asianomics Limited, in an interview with CNBC-TV18’s Udayan Mukherjee and Mitali Mukherjee, said that a hike of 50 basis points has come like a surprise.

RBI's credit policy: How will it impact India Inc?

Dalal Street Bulls running for cover

Bank shares were the worst hit as the RBI move to raise savings deposit rate will make funds costlier for lenders, coming at a time when already there are fears of credit growth slackening due to high interest rates.

Apart from banks, auto and realty shares also fell sharply because of their sensitivity to interest rates. The BSE sectoral indices for banks, auto and realty, tumbled over 3% each.

Market experts are worried that higher borrowing costs—resulting from an increase in interest rates—will hurt companies’ operating margins. This in turn, could lead to a downgrade in earnings estimates, and drag share prices lower.

“It is a good time to enter banking shares,”. SBI, ICICI Bank, HDFC Bank, PNB, HDFC and Axis Bank were down 2-5%.

RBI Disappoints

Equity benchmarks extended losses in the afternoon trade - the Nifty has touched the 5600 mark, reacting quite harshly to 50 basis points hike in key rates by the Reserve Bank of India.

The 30-share BSE Sensex shed 347 points, to 18,650 and the 50-share NSE Nifty tumbled 107 points to 5,594. Market breadth has widened its gap - three shares declined for every one share advanced on National Stock Exchange.

The central bank increased the repo rate (the rate at which banks borrow money from RBI) by 50 basis points to 7.25% to rein in inflation, which was almost 9% in March. It is a signal for banks to tighten interest rates.