Mumbai Feb 7 (IANS) Key Indian equity indices extended their losses and closed on a lower note on Wednesday as outflow of foreign funds and selling pressure in banking capital goods and IT stocks suppressed investors risk-taking appetite.
The wider Nifty50 of the National Stock Exchange (NSE) closed lower by 21.55 points or 0.21 per cent at 10 476.70 points.
On the BSE the barometer 30-scrip Sensitive Index (Sensex) closed at 34 082.71 points -- down 113.23 points or 0.33 per cent from its previous session s close.
However market observers said the "neutral stance" of the Reserve Bank of India (RBI) to keep its key interest rate unchanged at 6 per cent "came as a sigh of relief for an excessively bearish market".
"The market was slightly circumspect in the light of fiscal slippage and was expecting a stern stance. In contrast the RBI came with status quo accompanied by a milder stance. This came as a sigh of relief for an excessively bearish market " said Lakshmi Iyer CIO (Debt) and Head - Products Kotak Mutual Fund.
"We believe that the central banker s policy stance would be increasingly data driven and were the crude prices to behave favourably we may be in for a long pause " Iyer added.
The RBI kept its key interest rate unchanged at 6 per cent for the third time in succession at its final bi-monthly monetary policy review of the fiscal citing upside risks of inflation from rising global crude oil prices and other domestic factors.
Announcing the first policy review after the Union Budget 2018-19 was presented last week the RBI said its decision to keep its repo or short term lending rate for commercial banks unchanged was consistent with the neutral stance of the central bank aimed at achieving its median inflation target of 4 per cent.
Deepak Jasani Head - Retail Research HDFC Securities said: "Markets corrected further on Wednesday in a lacklustre session although the losses were modest. The main indices had initially opened on a positive note but failed to hold on to the gains during the day and ended lower."
"Technically with the Nifty correcting for the seventh consecutive session after breaking a trend line support last Friday the underlying short term trend remains down. However the pace of fall has slowed " Jasani told IANS.
On the currency front the Indian rupee weakened by 4 paise to 64.28 against the US dollar from its previous close at 64.24.
Vinod Nair Head of Research Geojit Financial Services said: "As expected the RBI continued to stay on the neutral stance awaiting more upcoming domestic and global macro data and seeing some sanity in the bond market. But prevailing inflationary pressure and fiscal slippage may lead to a hawkish view in the near future."
In terms of investments provisional data with the exchanges showed that foreign institutional investors sold scrips worth Rs 1 022.50 crore while domestic institutional investors purchased stocks worth Rs 461.19 crore.
Sector-wise the S&P BSE banking index fell by 125.01 points followed by capital goods index by 88.43 points and IT index by 66.29 points.
On the other hand the S&P BSE oil and gas index edged higher by 260.44 points consumer durables index by 157.63 points and healthcare index by 149.57 points.
Major Sensex losers on Wednesday were: Coal India down 2.48 per cent at Rs 297.85; ONGC down 2.24 per cent at Rs 189.80; Asian Paints down 0.91 per cent at Rs 1 121; Tata Motors down 0.81 per cent at Rs 377.50; and Dr Reddy s Lab down 0.79 per cent at Rs 2 111.70.
Major Sensex losers were: Bharti Airtel down 2.03 per cent at Rs 429.85; Wipro down 1.85 per cent at Rs 289.45; Larsen and Toubro down 1.58 per cent at Rs 1 332.65; Yes Bank down 1.58 per cent at Rs 333.20; and HDFC Bank down 1.37 per cent at Rs 1 871.40.
--IANS
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