The market suffered sharp declines following the RBI's surprise decision to hike interest rates by 25 basis points, contrary to expectations of a rate cut. The Sensex plunged over 500 points and ended down 1.85% while the Nifty breached 6,000 points. Rate sensitive sectors such as banks, capital goods, and real estate saw major declines. The RBI Governor cited rising inflation for the decision to take a more hawkish stance compared to other central banks like the US Fed.

1. The Guv talks hawkish....Sensex plunges 1.85%...rate sensitives crash
Market Summary
20-Sep-2013
Following yesterday's spectacular rally, markets suffered a sharp annihilation today on RBI’s policy shock. Contrary to
rate cut hopes, RBI took the markets by surprise by hiking the repo rate by 25 bps. Sensex crashed over 500 points
and Nifty breached 6K on the lower side immediately after the rate hike announcement. In late noon trades,
benchmarks recovered some lost ground. Both frontline gauges were above the crucial levels of 20K and 6K at the
close. Rate sensitives were butchered the most.
Among global peers, US and Asian indices edged lower on profit booking by investors whereas European indices were
trading in green.
Back home, citing the rising inflation, in a sharp contrast to Fed's stance, RBI Guv, Rajan took an hawkish stance by
hiking the repo rate by 25 basis points to 7.5% from 7.25% while keeping the CRR unchanged at 4.0%. Rajan reduced
the Marginal Standing Facility (MSF) rate by 75 basis points from 10.25% to 9.5% and minimum daily maintenance of
the cash reserve ratio (CRR) from 99% of the requirement to 95%. The hike in repo rate will tighten the liquidity and
will also make the loans more expensive. On the other hand, the deposit rates may be hiked to promote deposits.
(Read More)
HCL Technologies rallied 3.7% on BSE in the otherwise negative market, after Foreign Investment Promotion Board
(FIPB) approved proposal to increase limit on overseas holdings in the lender to 74% from 49%. (Read More)
Financial Technologies has repaid $76 million of foreign currency and External Commercial Borrowings (ECB) loans.
The company back in August remitted $110 million to overseas arm. The stock fell 1.22% on BSE. (Read More)
The market breadth on the BSE closed in negative. Advancing and declining stocks were 974 and 1430 respectively,
while 121 scrips remained unmoved.
The S&P BSE Sensex ended at 20263.71, down 382.93 points or 1.85%. The 30 share index touched a high and a
low of 20677.99 and 20051.43 respectively. 8 stocks advanced against 21 declining ones on the benchmark index.
The CNX Nifty lost 103.45 points or 1.69% to settle at 6012.10. The index touched high and low of 6130.95 and
5932.85 respectively. 19 stocks advanced against 31 declining ones on the index.
S&P BSE Sensex CNX Nifty
The S&P BSE Mid-cap index moved down to 5677.24 and lost 0.83% while S&P BSE Small-cap index hammered
down by 1.01% to 5485.30.
The broader S&P BSE 500 index decreased to 7280.90 (down 1.43%) and CNX 500 index declined to 4560.10 (down
1.46%).
The volatility as denoted by INDIA VIX gained 0.94% at 24.73 from its previous close of 24.50 on Thursday.
Sectors in action
On the BSE Sectorial front, Consumer Durables (up 0.35%), Power (up 0.28%) and Healthcare (up 0.13%) were the
top gainers.
Real Estate (down 6.53%), Banks (down 4.18%) and Capital Goods (down 3.04%) were the top losers.
The Angels and the Devils
GAIL (India) Ltd (up 3.51%), Sun Pharmaceutical Industries Ltd (up 1.54%), Coal India Ltd (up 1.26%), Bharat Heavy
Electricals Ltd (up 1.12%) and Wipro Ltd (up 0.83%) were the top gainers on the Sensex.
ICICI Bank (down 4.78%), Larsen And Toubro Ltd (down 4.63%), Sesa Goa Ltd (down 3.93%), Hindustan Unilever Ltd
(down 3.80%) and HDFC Bank (down 3.63%) were the top losers on the Sensex.
Benchmark Drivers
ICICI Bank (-68.12 points), HDFC Bank (-56.40 points), Housing Development Finance Corporation Ltd (-46.47 points),
Larsen And Toubro Ltd (-40.74 points) and Hindustan Unilever Ltd (-33.13 points) were the major Sensex drivers

2. Larsen And Toubro Ltd (-40.74 points) and Hindustan Unilever Ltd (-33.13 points) were the major Sensex drivers
today.
On the other end ICICI Bank (-16.96 points), HDFC Bank (-13.85 points), Housing Development Finance Corporation
Ltd (-10.70 points), Larsen And Toubro Ltd (-10.48 points) and Hindustan Unilever Ltd (-8.61 points) were the major
Nifty movers today.
Pivot, Supports and Resistance Levels
CNX Nifty is now pivoted at 6025 for next session. The next support is at 5920 and on upside it has a resistance at
6118 levels.
CNX Nifty
Eff. Date S 3 S 2 S 1 PIVOT R 1 R 2 R 3 Actual Close
23-Sep-2013 5722 5827 5920 6025 6118 6223 6316 -
20-Sep-2013 5954 5997 6056 6099 6159 6202 6261 6012.10
19-Sep-2013 5777 5809 5854 5886 5931 5962 6008 6115.55
S&P BSE Sensex has a pivot at 20331 with first level of support and resistance at 19984 and 20611 respectively.
S&P BSE Sensex
Eff. Date S 3 S 2 S 1 PIVOT R 1 R 2 R 3 Actual Close
23-Sep-2013 19358 19704 19984 20331 20611 20958 21237 -
20-Sep-2013 20024 20185 20416 20578 20808 20970 21201 20263.71
19-Sep-2013 19582 19679 19821 19917 20059 20155 20297 20646.64
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