Mumbai, May 31: The BSE benchmark Sensex today restricted early losses to close 94 points lower at 16,218.53 as investors found a positive even in the economy putting its worst performance in nine years as they hoped the RBI and the government will step in to check the growth slide.
The monthly derivatives expiry that happened today also contributed to help the market recover from the 226-point loss it registered during the day.
The rupee, which slipped to a record low of 56.50 to a dollar, also staged a comeback of sorts and was last trading at 56.06 as compared to 56.24 yesterday.
After the release of GDP data, Finance Minister Pranab Mukherjee said the government will take necessary steps to improve growth. By the evening, the Finance Ministry announced a slew of austerity measures to cut government expenditure.
The economic growth rate slowed to a nine-year low, both in the March quarter at 5.3 per cent as well as in 2011-12 at 6.5 per cent.
The recovery in stocks was also helped by a firm opening in European stock markets on the back of better-than-expected German retail sales as well as French consumer spending data.
“Rupee showed some strength against dollar. Nifty recovered from lows. Stronger European markets also lifted the sentiments,” said Inventure Growth and Securities Head Research Milan Bavishi.
Tata Motors, which lost 11.8 per cent yesterday, was again the worst performer in Sensex today shedding 4.17 per cent, followed by ICICI Bank (4 pc), Maruti (3.86 pc) and Jindal Steel (2.57 pc).
“We think RBI will likely ease its hawkish stance in the forthcoming monetary policy...more leeway to cut rates should arise; we expect another 75-100 bps Repo rate cuts by RBI in FY13,” said Deepali Bhargava, Chief Economist, Espirito Santo.
The 50-share NSE Nifty closed lower by 26.50 points, or 0.54 per cent at 4,924.25, after touching the day's low of 4,883.55.
On the global front, barring Taiwan that finished higher, other Asian markets closed with losses today as fresh worries about Spain and Italy sparked fears of a deteriorating situation in Europe and rising uncertainty saw investors dump riskier assets.
Indices in China, Singapore, Hong Kong, Japan, Taiwan and South Korea ended with up to 1.05 per cent losses. However, indices in Europe were trading higher in their early trade with France, Germany and London were up by 0.43 pct to 0.79 per cent respectively.
Out of the 30-share Sensex pack, 18 stocks finished lower while 12 scrips ended higher. Auto, banking, consumer durable and capital goods stocks registered losses while realty shares attracted buying support.
Notwithstanding today's recovery, the Sensex logged its worst ever performance in May since 2006 as it plunged 6.4 per cent this month.
Major losers from the Sensex today were Tata Motors (4.17 pc), ICICI Bank (4 pc), Maruti Suzuki (3.86 pc), Jindal Steel (2.57 pc), Sun Pharma (2.37 pc), SBI (2.00 pc), Tata Steel (1.80 pc), L&T (1.26 pc), Sterlite (1.21 pc) and Hero Motocorp (0.95 pc).
However, Hindalco firmed up by 2.06 per cent, followed by NTPC (1.28 pc), Hindustan Unilever (1.26 pc), Cipla (1.08 pc), HDFC Bank (1.06 pc) and DLF (0.79 pc).
Talking about F&O expiry, Anindya Banerjee, Senior Manager Currency Derivatives Research Desk, Kotak Securities said: “Rollover in Nifty remains below market average rollover. This is indicative of change in short term trend for the market.”
The market breadth continued to show negative trend as 1,417 stocks finished with losses while 1,184 stocks ended with gains. The total turnover moved up to Rs 1,782.54 crore from Rs 1,736.52 crore yesterday.
Meanwhile, Foreign institutional investors sold shares worth Rs 10.75 crore yesterday as per provisional data with bourses.
