The 30-share BSE Sensex and the 50-share NSE Nifty tracked the global trend and held flat. However, soon after European markets opened, the BSE Sensex rose 61 points or 0.2 per cent to 16919. The NSE Nifty also inched up 0.2 per cent to 5124. However, these indices gave back these gains and slipped into the negative territory. At 2.20 pm, BSE Sensex and Nifty were flat to negative.
Markets had built in huge expectations ahead of the Reserve Bank's announcements yesterday, and fell sharply after the measures announced fell way short of expectations. Major shares traded flat since morning.
IT sector shares fall
IT stocks continued to underperform the broader markets. Infosys (-1%) and HCL Tech (-1.53%)were among the laggards on the Nifty index. IT stocks have been out of favour over the uncertainty in the direction of the rupee and the global macro environment. “Even as depreciated rupee level provides decent downside support, upside remains contingent on improvement in demand outlook,” Kotak Securities said in a note.
Bank shares gain
Bank shares rose after as the Reserve Bank of India eased restrictions on foreign flows into government securities market. Banks could benefit as they would be able to meet the credit demand for businesses in India as government looks to borrow outside India. SBI shares rose 0.6 per cent while HDFC Bank gained 1.8 per cent. Union Bank shares rose 2.6 per cent while Indusind Bank gained 1.8 per cent.
Asian stocks were mostly down after Spain formally requested help to rescue its ailing banks. Japan's Nikkei index was the biggest underperformer, falling 0.92%. Nomura, a Japanese bank, cut its earnings outlook for Greek banks as financial institutions face sovereign concerns, growth challenges and higher loan-loss charges, and downgraded its rating on the country's three largest lenders. Nomura reduced its rating on National Bank of Greece, Eurobank to "reduce" from "neutral," while it cut to "neutral" from "buy."
(With inputs from Reuters)