Key benchmark indices close lower - RK Global

Key benchmark indices edged lower in volatile trade, with market sentiment hit adversely by hawkish comments from the RBI governor Dr. Rajan on Thursday, 26, that inflation continues to remain high. Weakness in European stocks also weighed on sentiment. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, dropped to three-week closing low. The Sensex shed 166.58 points or 0.84%, up close to 55 points from the day's low and off about 255 points from the day's high.

The market breadth, indicating the overall health of the market, turned negative from positive in late trade. SBI fell 2%. SBI announced after market hours that it has repurchased of a principal amount of $147 million of $1 billion 3.25% bonds due 2018 . The 2018 Bonds were issued by SBI on 18 April 2013 and are listed on the Singapore Exchange Securities Trading. The repurchase of the Bond took place between 26 August 2013 and 26 September 2013. The bank is in the process of cancelling the repurchased 2018 Bonds and the aggregate outstanding principal amount of the 2018 Bonds following such cancellation will be $853 million, SBI said in a statement.

Shares of realty firm Omaxe dropped following weak response to the OFS of the company's shares by promoters which was aimed at meeting the minimum public shareholding rule. The stock lost 3.88% to Rs. 136.35. The OFS got bids for just 42.3 lakh shares, compared with 1.52 crore shares on offer, data from the stock exchanges showed. The OFS was subscribed 27.74% at an indicative price of Rs. 135.67 per share, compared with floor price of Rs. 135.

The RBI has a neutral stance on interest rates for now, but it is still worried about high inflation, even when taking out volatile food prices, RBI governor on 26th Sep said that inflation is not due just to higher food prices. "Unfortunately there is still some inflation when you strip out the effects of food and energy. Therefore it is not just food, it's other factors also which are driving inflation," Rajan told reporters on the sidelines of a conference.

"CPI core (inflation) is about 8.2%, that is certainly high, but I think we are looking at all aspects of inflation at this point," Rajan said. With regard to cross-border capital flows, Rajan said that especially emerging markets were often the losers as flows turned around very quickly. "We need to solve this problem (of capital flows) and we need to take a more practical view of this," Rajan said, without going into details.

Source : Equity Bulls

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