Markets end flat; shrugs off repo rate hike

The markets ended flat, amid a volatile trading session, shrugging of the surprise move by the central bank which hiked the repo rate by 25 bps to 8% in its third quarter monetary policy review on Tuesday.

At close, the Sensex was down 24 points at 20,684 and the Nifty gave off 10 points to end at 6,126.

The reverse repo rate under the Liquidity Adjustment Facility (LAF) stands adjusted at 7%, and the marginal standing facility (MSF) rate and the bank rate at 9%.

The Cash Reserve Ratio (CRR) was kept unchanged at 4% of Net Demand and Time Liabilities (NDTL).

A month after touching a record high, CPI inflation came down to a three-month low of 9.87% in December compared with 11.16% a month ago. While the Wholesale Price Index (WPI) inflation was at five-month low in December at 6.16% compared with 7.52% the previous month.

Earlier in the day, after a positive start owing to firm Asian cues, markets slipped post the RBI Policy after Raghuram Rajan surprised the market and proved pollsters wrong as he decided to hike the key interest rate. Thereafter, the markets turned volatile to trade within a range of 100 points.

In the broader markets, the smallcap index was up 0.2% while the midcap index closed flat with a negative bias but outperforming the BSE benchmark index which was down 0.1%.

On the sectoral front, IT and Teck indices closed 1% lower as profit taking in TCS, Infosys and Wipro weighed on the indices. These stocks lost 0.5-1.5%.

Health Care index down 0.8% and Bankex down 0.3% were the only other indices to close in the negative territory.

Meanwhile, Metal and Realty indices added over 1% each in today’s trade. Capital Goods, Oil & Gas, Consumer Durables, Auto and FMCG indices added 0.1-0.4%.

Maruti Suzuki down 8% was the top loser among Sensex-30, falling nearly 12% from intra-day high on the BSE, after its board approved implementing the expansion of manufacturing facility in Gujarat through Suzuki subsidiary.

Axis Bank, Sun Pharma, Cipla, HDFC Bank, NTPC and ONGC down 0.5-3% were the other major losers.

Hindustan Unilever witnessed profit taking today, slipped nearly 1% on concerns over volume growth in the third quarter and expensive valuations.

Metal names like Tata Steel, Sesa Sterlite and Hindalco up 2-3.5% were the top gainers.

Auto names like Tata Motors, Baja Auto and Mahindra & Mahindra gained 0.7-2.5%.

BHEL, Tata Power, ICICI Bank and ITC up 0.8-1% were the other major gainers.

The market breadth in BSE ended marginally positive with 1,297 shares advancing and 1,246 shares declining.

Smart Moves 

Munjal Auto ended higher by 8% at Rs 41 after the company today reported robust earnings for the third quarter ended December 2013.

Granules India soared 8% to Rs 228 after reporting nearly four-fold jump in consolidated net profit at Rs 21.81 crore for the quarter ended December 31, 2013 (Q3), on back of higher sales.

Accelya Kale Solutions rallied 5% to Rs 746 on hopes of interim dividend in the forthcoming board meet.

Just Dial fell by nearly 13% to Rs 1,288 on BSE after net profit rose 3.80% to Rs 29.75 crore on 6.39% increase in total income from operations to Rs 119.86 crore in Q3 December 2013 over Q2 September 2013.

Idea Cellular dipped 4% to Rs 139, extending its previous day’s 5% fall, after reporting a lower-than-expected consolidated net profit at Rs 468 crore for the third quarter ended December 31, 2013 against an average analyst estimate of Rs 504 crore.

Styrolution ABS (India) surged 2% to Rs 407 after nearly 75% of total equity of the company have changed hands in a single block deal on the Bombay Stock Exchange.

Global Markets 

Asian shares were pinned near five-month lows as concerns that slower growth in China and reduced U.S. monetary stimulus could hurt some emerging economies dependent on exports and foreign capital.

Investors are now focusing on whether the central bank of Turkey, one of the epicenters of the latest rout in emerging markets, could salvage the lira at an emergency policy meeting later in the day.

MSCI's broadest index of Asia-Pacific shares outside Japan briefly dipped to a five-month low, extending a 3.8% loss in the past three days before recouping the losses to trade almost flat.

Japan's Nikkei average rose 0.2% though it briefly fell to a 2 1/2-month low.

European markets started on a positive note with the CAC, DAX and FTSE gaining 0.3-0.8%.