Nifty ends below 5,950 on RBI's hawkish stance

Markets ended lower this Friday with 50-share Nifty closing below the crucial support level of 5,950 on back of profit-booking in rate sensitive sectors such as banks, real-estate after the central bank’s policy action.

The Reserve Bank of India in its monetary policy review reduced repo rates by much-anticipated 25basis points but hinted towards a little room for future policy easing.

“The hawkish statement by the Governor reaffirms our belief. We expect not more than 25 basis points incremental reduction in Repo till December 2013.,” said Amar Ambani, Head of Research, India Infoline.

The Bombay Stock Exchange's 30-share index Sensex fell 160.13 points to end at 19,575.64 while the National Stock Exchange's 50-share Nifty declined 55.35 points to close at 5,944.

In the annual monetary policy for 2013-14, RBI also cut the ceiling on total SLR securities held under the HTM category to 23 per cent of Demand and Time Liabilities (DTL) from 25 per cent earlier.

Global risk appetite firm after a report that may show US employers hired more workers last month coupled with an interest rate cut by the European Central Bank added to hopes that more stimulus from yet another major central bank will help shore up the global economic recovery.

In US, payrolls increased by 140,000 workers following a gain of 88,000 in March, according to the median estimate in a Bloomberg survey of 90 economists.

Meanwhile, ECB President Mario Draghi on Thursday said the ECB stood ready to ease further if needed, dealing a blow to the euro currency as investors looked elsewhere for better returns.

Asian markets ended mixed with Hong Kong’s Hang Seng rose 0.1% to 22,689.83, China’s Shanghai Composite rose 1.2% to 2,205, Singapore’s Straits Times declined 0.3% to 3,373.

Japanese markets are shut today and will reopen on Tuesday.

Meanwhile, European markets traded higher. France’s CAC gained 0.1% to 3,863, Germany’s DAX rose 0.1% to 7,972 and UK’s FTSE was up 0.1% to 6,466.

Back home, the key sectoral indices such as metals, capital goods, technology and IT gained while banks, real-estate, automobiles and PSU sectors declined on the BSE.

The gainers on the Sensex included, Jindal Steel gaining 4%, Hindalco Industries and Tata Steel were up over 2%, Sun Pharma rose 2% Infosys added 1% on the BSE.

The laggards included counters such as Tata Motors falling 4%, SBI and ICICI Bank declined 3.6 % respectively, GAIL dropped 3%, Bajaj Auto shed nearly 2.5% on the BSE.

The key notable movers included, Multi Commodity Exchange of India (MCX) soared 7% to Rs 992.95 in otherwise weak market on the Bombay Stock Exchange on back of heavy volumes.

Reliance Communications (RCom) gained 5% to Rs 110.15, extending its one-month long rally after Anil Ambani-owned firm signed Rs 1,200-crore agreement with elder brother Mukesh Ambani-owned Reliance Jio Infocomm to share its optic fibre network on April 2.

Adani Ports and Special Economic Zone (APSEZ) surged 6% to Rs 155.30 on reports that the company has received security clearance from the Union home ministry to bid for port projects in the country.

The broader markets declined with mid-caps and small-caps falling nearly 0.3% on the BSE.

The market breadth was negative. Out of 2,304 stocks traded, 1,267 stocks declined compared to 919 advances on the BSE.