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Dalal Street unhappy; Sensex dips 160 points on ‘hawkish’ RBI policy

In highly volatile trade, the BSE benchmark Sensex on Friday fell by 160 points on profit-booking in interest-sensitive banking, auto and realty stocks as RBI adopted a 'hawkish' stance in its monetary policy 2013-14 that overshadowed its 0.25 per cent cut in repo rate.

Snapping three days of gains, the Sensex fell by 160.13 points, or 0.81 per cent, to 19,575.64. The index had gained 449 points in the last three sessions.

Similarly, the Broad-based National Stock Exchange index Nifty fell by 55.35 points, or 0.92 per cent to 5,944 points after touching a low of 5,930.15.

Brokers said interest-related stocks of bank, auto and realty sectors suffered losses on fresh selling after the RBI said assessment of growth-inflation dynamics limits scope for further easing of policy rate. They said the bank holding CRR unchanged overshadowed the 0.25 per cent cut in key rates.

'While RBI did cut policy rates by 25 basis points as expected, it has adopted an unexpectedly hawkish stance despite mounting evidence for easing inflation going ahead and still soft economic activity,' said MOFSL chairman and manging director Motilal Oswal.

The banking sector index suffered the most by losing 2.40 per cent to 14,183.60 as ICICI Bank, SBI, HDFC Bank and Housing Development Finance Corp suffered heavy losses on profit-booking.

The auto sector was second worst performer by losing 1.50 per cent to 10,831.43 as stocks of Tata Motors, Maruti Suzuki, Hero MotoCorp and Bajaj Auto lost substantial ground.

The realty sector fell by 1.39 per cent to 1,902.66, and consumer durable index by 1.06 per cent to 7,421.56.

In 30-BSE index components, 18 stocks declined led by GAIL India, Cipla, ITC, ONGC and TCS.

However, a gain in Infosys, Sterlite Industries, Hindalco, Jindal Steel, RIL, Sun Pharma and L&T, saved the market from any major fall.


The Indian rupee depreciated further by 13 paise to close at 53.94 against the dollar at the Interbank Foreign Exchange (Forex) market on Friday on the back of weakness in local equities despite key rate cut by the RBI.

Dollar demand from importers also weighed on the rupee, while sustained capital inflows and weak dollar overseas limited the fall to certain extent, a forex dealer said.
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