Volatility marked trading in the capital market on Tuesday with Sensex plunging 167 points intra-day as banking regulator RBI raised repo rate by 25 basis points to 8 per cent. Repo rate is the rate at which RBI lends money to commercial banks.

Sensex opened on a flat note at 20,721 against the previous close of 20,707. It hit a day’s high of 20,795 and low of 20,554. The benchmark index closed with a loss of 24 points at 20,684.

The turnover on the BSE was higher at Rs 2,438 crore against Rs 1,867 crore. Foreign institutional investors sold shares worth Rs 1,334 crore on Monday, as per provisional data from the stock exchanges.

Shrugging of RBI hiking its lending rates, realty stocks gained in highly volatile trade. Maruti Suzuki tumbled eight per cent to Rs 1,563 as the company said it will implement the expansion project in Gujarat through a 100 per cent Suzuki-owned subsidiary. Maruti reported 36 per cent increase in net profit at Rs 681 crore in the third quarter even as its income fell to Rs 11,011 crore (Rs 11,389 crore).

Shares of steel companies and iron ore miners were up as the government imposed 5 per cent duty on the export of iron ore pellets.

Major gainers were HDIL (6%), Apollo Tyres (6%), Future Retail (4%), IPCA Lab (4%), Glenmark Pharma (4%), Tata Steel (3%) and Bajaj Finance (3%).

Prominent losers were Maruti Suzuki (-8%), IRB Infra (-5%), Suzlon Energy (-5%),

Idea Cellular (-4%), Shriram City (-4%), Piramal Ent (-4%), Coromandel Intl (-5%) and UPL (-4%).

European stocks rose as Siemens AG posted profit that beat estimates. Asian shares were down.

Market participants keenly await the outcome of the two-day Federal Open Market Committee meeting that begins today.The likelihood of a further tapering of the US Federal Reserve’s bond-buying programme and slowdown in profit growth at China's industrial companies weighed on the market sentiment.

(This article was published on January 28, 2014)
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