Sensex plunges 133 points; HUL, ICICI Bank down post Q2 results

The Indian equity markets nosedived today with Sensex closing 0.71 percent lower at 18625.34 and the Nifty closing at 5664.30, 0.72 percent lower ahead of the RBI policy review on 30 October.

Portfolio manager PN Vijay expects some sort of monetary loosening from the Reserve Bank of India since inflation has not risen dramatically for quite sometime now.

Faced with subdued manufacturing sector performance, Prime Minister’s key advisor C Rangarajan on Thursday lowered the growth projection for the current fiscal to 6 percent from 6.7 percent estimated earlier.

Globally, there is some positive news with the US economy consolidating and recovering. In an interview with CNBC, Gerard Lyons of Standard Chartered Bank said that although it is slow, the US economy is on the recovery path.

The Finance Ministry is hopeful of raising Rs 12,000-13,000 crore from stake sale in the public sector undertakings (PSUs) by December-end which could help the government to rein in fiscal deficit to around 5.3 percent of the GDP in 2012-13.

“We are hopeful that disinvestment will pick up and about Rs 12,000-Rs 13,000 crore will come in by December. For the full fiscal we expect to raise Rs 30,000 crore,” Department of Economic Affairs (DEA) Secretary Arvind Mayaram told PTI in an interview.

Bank and FMCG stocks were top losers today, while auto stocks posted some gains.

Stocks in news

SBI was down 1.38 percent on concerns of a potential increase in bad loans in the July-September quarter.

Investors have reacted rather negatively to CESC’s acquisition of Firstsource. CESC is down 15 percent while Firstsource was down almost 13 percent post the merger news.

ICICI Bank is down 0.73 percent in spite of the company’s strong Q2 figures. Rikesh Parikh, VP-Markets Strategy and Equities of Motilal Oswal Securities told CNBC-TV18 that ICICI Bank numbers were broadly in line with estimates. “Going forward we expect net interest margin to be maintained around 3 percent as cost of funds reduces, with no deterioration in assets quality,” he said.

HUL was down 2.14 percent after the company reported lower volume growth for Q2. Its net profit however was up 17 percent.

Kingfisher Airlineswas up 5 percent after the company’s management’s meeting with DGCA.