Sensex closes in red, SBI rallies despite below-estimate Q2 profit

After a lot of struggle with the bears, the market ultimately closed in the red. The Sensex closed down 87.51 points at 20194.40, and the Nifty lost 28.45 points to close at 5989.60.

Ridham Desai of Morgan Stanley expects a 10 percent downside for the Sensex in the 12 months. “I do see some absolute downside to share prices. Our Sensex target actually calls for a 10 percent downside. We don’t have a year end target anymore but it is a 12-month target,” he told_CNBC-TV18_.

[caption id=“attachment_1127165” align=“alignright” width=“380”]  Reuters[/caption]

Meanwhile, barely a month after the rupee hit a two-month high and showed signs of stabilising after its brutal fall this year, the currency is at risk from a re-emergence of heavy demand for dollars from oil importing firms.

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As the rupee hit a nine-week low against the dollar on Wednesday, extending its drop over four trading sessions to 2 percent, the overriding fear in Indian markets was the return of dollar buying by oil companies, coupled with concerns the Reserve Bank of India (RBI) will soon wind down a special dollar facility for these firms.

Stocks in news:

State Bank of India shares rallied 4 percent before settling up 1.34 percent. SBIposted its steepest fall in quarterly net profit in more than two years due to worsening asset quality and a slump in treasury operations.

Idea Cellular shares rose 2.81 percent. On Tuesday, the company had announced a cut in its2G data tariff by 90 percent.

Tata Global is the biggest loser, with shares closing down 6.63 percent.