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Markets crash in opening trade on RBI move
Published on Wed, Jun 25, 2008 at 10:16, Updated on Wed, Jun 25, 2008 at 11:06 in 
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Mumbai: The Reserve Bank of India's move of hiking repo rate and CRR by 50 bps each has spooked the markets in opening trade. Rate sensitive sectors like banks, realty and auto have knocked down very badly.
Gilt prices also tumbled in the morning trade. The Sensex and Nifty have hit new-2008 lows. All BSE indices are trading in red.
The Nifty slipped below 4100 for the first time since August 22, 2007. At 9:56 am, the Sensex was down 361 points at 13,745 and the Nifty down 95 points at 4,096. The CNX Midcap was down 120 points at 5,443.
Market breadth is negative; 111 shares are advancing while 734 shares declining on the NSE.
Amongst frontliners, DLF, Tata Motors, ICICI Bank, Infosys, Tata Steel, L&T, ONGC, HDFC, HUL, Maruti, Power Grid, Unitech, Ambuja Cements and BHEL slipped. However, TCS, Ranbaxy and Grasim gained.
BSE Bankex is down -2.8 per cent, Realty -3.4 per cent, Auto -2.2 per cent, IT, Capital Goods, FMCG, Power and Healthcare indices are down over 1 per cent.
RBI has hiked both rates on Tuesday evening, which is one of the measure to contain inflation. CRR will be hiked in two phases of 25 bps each, first from July 5 to 8.50 per cent and next from July 19, 2008 to 8.75 per cent, and repo rate hike of 50 bps to 8.5 per cent with immediate effect. Experts believe that this is not yet over and expect one more rate hike. They also see inflation in double digit for the next few weeks.
Asian markets were trading mixed. US markets ended lower. The Dow Jones lost 34.93 points, or 0.29 per cent, to 11,807.43. The Standard & Poor's 500 index fell 3.71 points, or 0.28 per cent, to 1,314.29, and the Nasdaq composite index declined 17.46 points, or 0.73 per cent, to 2,368.28.
Market cues:
- RBI hikes repo rate by 50 bps with immediate effect
- RBI hikes CRR by 50 bps in 2 stages to 8.75 per cent
- FIIs net sell $ 153.9 mn in equity
- NSE F&O Open Interest down by Rs 800 cr at Rs 81,863 crore
- Left-UPA meet today to discuss nuke deal
F&O cues:
- Marketwide rollover at 43.1 per cent Vs 26.5 per cent a day ago
- Nifty rollover at 44.7 per cent Vs 31 per cent a day ago
- Aggressive short rollover seen in banking and real estate stocks
- Futures Open Interest down by Rs 566 crore and Options Open Interest down by Rs 234 crore
- Nifty net Futures up 3.5 per cent in Open Interest; add 15 lakh shares in Open Interest
- Nifty June Futures at 19 pts discount Vs 1.65 premium a day ago
- Nifty July Futures at 50.7 pts discount Vs 16 pts discount a day ago
- Nifty Open Interest Put-Call ratio at 1.08 Vs 1.18
- Rollover of Option to lower levels
- Nifty Puts shed 17.2 lakh shares in Open Interest
- Nifty June 4500 Put shed 17.7 lakh shares in Open Interest
- Nifty June 4200 Put sheds 10 lakh shares in Open Interest
- Nifty June 4400 Put sheds 6.5 lakh shares in Open Interest
- Nifty June 4100 Put shed 4.2 lakh shares in Open Interest
- Nifty June 4500 Call sheds 4.7 lakh shares in Open Interest
- Nifty July 4100 Put add 9 lakh shares in Open Interest
- Nifty July 4000 Call add 7.7 lakh shares in Open Interest
- Nifty June 4300 Call add 7.6 lakh shares in Open Interest
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