Indian bonds and currency fell today as investors took the appointment of Urjit Patel as the next governor of the Reserve Bank of India as a signal of policy continuity at the central bank, making a near term cut in interest rates unlikely. The benchmark 10-year bond yield rose 4 basis points to 7.14 percent, while the rupee fell to a near one-month low of 67.17/67.18 to the dollar, compared with its close of 67.07.
Patel, currently an RBI deputy governor, had been seen as among the more hawkish candidates that had been in the running to take over from Raghuram Rajan, who steps down as governor on September 4. The RBI had cut the policy repo rate by 150 bps from January 2015 to April this year but has held them steady since then.
The market extended losses amid consolidation in morning trade, dragged by banks, technology and auto stocks. However, the buying in FMCG and HDFC group stocks limited the selling pressure. The 30-share BSE Sensex was down 108.67 points to 27968.33 and the 50-share NSE Nifty declined 37.55 points to 8629.35 on weak market breadth. Experts say the market has been in a tight range and has a strong support at 8500 on the Nifty due to consistent inflow of foreign money.
The economy is heading into a credit boom and next 12 months look reasonably solid, Saurabh Mukherjea of Ambit Capital said. His Sensex year-end target remains at 29,500. About 1162 shares declined against 1020 advancing shares on the Bombay Stock Exchange. ITC, HUL and BHEL were top gainers on the Sensex whereas ICICI Bank, TCS, Axis Bank, Lupin, Bharti Airtel and Sun Pharma slipped over a percent.
Patel, currently an RBI deputy governor, had been seen as among the more hawkish candidates that had been in the running to take over from Raghuram Rajan, who steps down as governor on September 4. The RBI had cut the policy repo rate by 150 bps from January 2015 to April this year but has held them steady since then.
The market extended losses amid consolidation in morning trade, dragged by banks, technology and auto stocks. However, the buying in FMCG and HDFC group stocks limited the selling pressure. The 30-share BSE Sensex was down 108.67 points to 27968.33 and the 50-share NSE Nifty declined 37.55 points to 8629.35 on weak market breadth. Experts say the market has been in a tight range and has a strong support at 8500 on the Nifty due to consistent inflow of foreign money.
The economy is heading into a credit boom and next 12 months look reasonably solid, Saurabh Mukherjea of Ambit Capital said. His Sensex year-end target remains at 29,500. About 1162 shares declined against 1020 advancing shares on the Bombay Stock Exchange. ITC, HUL and BHEL were top gainers on the Sensex whereas ICICI Bank, TCS, Axis Bank, Lupin, Bharti Airtel and Sun Pharma slipped over a percent.
