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The stock markets ended the day on a gloomy note with both benchmark indices closing in the red.
According to market analysts, the lower-than-expected GDP figures for the April-June quarter at 5.5 per cent dampened hopes of a rate cut by RBI in its upcoming monetary policy review in September and adversely impacted investor sentiment. Unwinding of long positions on the last trading day of August also played spoilsport.
The Sensex closed at 17,381, down 161 points or 0.92 per cent, while the Nifty closed at 5,259, down 57 points or 1.06 per cent.
Though all the sectoral indices closed in the red, the Banking, Realty, Power and Metal stocks were worst hit.
Bharti Airtel, Cipla, SAIL, HDFC and Ranbaxy were the top Nifty gainers, while Hero MotoCorp, BPCL, Kotak Bank, IDFC and BHEL were the losers on the Nifty.
Abhishek Goenka - Founder & CEO, India Forex Advisors, said: "The Indian GDP figures for the first quarter of FY2012-13 came out at 5.5 per cent slightly better than 5.3 per cent growth recorded in the previous quarter. We expect it to deteriorate further and could dip below 5 per cent. The prevailing deficiency in monsoon across the country will impact the agricultural sector fuelling further inflation in the days to come. Increased inflation will further delay any rate cuts hampering growth. The absence of policy reforms and further bad news over coal deals would make it very difficult for the Centre to boost the investment cycle and stimulate growth. The overall scenario looks bleak.”
European stocks were up as investors awaited a speech by Federal Reserve Chairman Ben S. Bernanke later in the day. Asian markets were down.
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