Mumbai, Sep 30 (IANS): In volatile trade, a benchmark index of Indian equities markets closed Tuesday's trade flat -- up only 33 points or 0.13 percent -- even as the Reserve Bank decided to keep key interest rates unchanged in its fourth bi-monthly policy review.
The benchmark 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which was trading flat in the pre-afternoon trade session, made substantial gains of more than 200 points and the wider 50-scrip Nifty of the National Stock Exchange (NSE) crossed the 8,000-mark despite the central bank's decision to keep the repo rate, or the interest that banks pay when they borrow money from the RBI to meet their short-term fund requirements, unchanged at 8 percent.
The status quo in key policy rates mean the equated monthly installments (EMIs) on home, auto and other loans would remain unchanged as these rates determine lending and borrowing rates of the commercial banks.
A cut in these rates would have also reduced the cost of accessing funds for lending institutions. It would have also eased money supply in the financial system by making it more attractive for commercial banks not to park their funds with the RBI in the form of government securities, and instead lend it for commercial purposes.
Interest-sensitive stocks like metal, bank, capital goods, realty, power and automobile plummeted. Interestingly most of the sectors apart from information technology (IT) were trading with major gains in the mid session trade. However, healthy buying was observed in healthcare, consumer durable, oil and gas and fast moving consumer goods (FMCG) stocks.
The Sensex, which opened at 26,610.71 points, closed trade at 26,630.51 points, up 33.40 points or 0.13 percent from the previous day's close at 26,597.11 points.
The Sensex touched a high of 26,851.33 points and a low of 26,481.31 points in the intra-day trade.
The Nifty too closed flat. It ended trade 5.90 points or 0.07 percent up at 7,964.80 points.
The apex bank Tuesday adjusted to 7 percent the reverse repo rate, or the interest that the RBI pays to commercial banks when they park their surplus short-term funds with the central bank.
The Cash Reserve Ratio (CRR) was unchanged at 4 percent. The marginal standing facility rate and the Bank Rate was left unchanged at 9 percent.
The statutory liquidity ratio (SLR), the mandatory amount of bonds lenders must keep with the RBI, has been maintained to 22.0 percent of their net demand and time liabilities (NDTL).
The central bank's action is along expected lines as most analysts predicted a status quo, considering the macro-economic situation and current data.
The S&P metal index of the BSE lost 110.72 points, followed by capital goods index fell 83.39 points, bank index which was lower by 82.51 points, realty index was down 43.11 points and power index decreased by 24.50 points.
However, healthcare index was up 190.91 points, consumer durables index gained 169.64 points, oil and gas index was higher by 121.01 points and FMCG index rose 49.69 points.
The major Sensex gainers were: Sun Pharma, up 2.77 percent at Rs.857.30; HDFC Bank, up 2.17 percent at Rs.1,052.60; Bajaj Auto, up 1.96 percent at Rs.2,348.95; Cipla, up 1.59 percent at Rs.625.70; and Tata Steel, up 3.10 percent at Rs.474.20.
The losers were: BHEL, down 2.85 percent at Rs.200.95; Axis Bank, down 2.18 percent at Rs.377.80; HindalCo Inds, down 1.69 percent at Rs.156.80; Mahindra and Mahindra, down 1.62 percent at Rs.1,362.30; and Tata Motors, down 1.57 percent at Rs.502.75.
Among the Asian markets, Japan's Nikkei closed 0.48 percent down and Hong Kong's Hang Seng lost 1.28 percent. However, China's Shanghai Composite Index was higher by 0.26 percent.
In Europe, London's FTSE 100 was trading 0.11 percent down. However, Germany's DAX Index was up by 0.48 percent, and the French CAC 40 Index was higher by 1.20 percent at the closing bell here.