RBI rate cut fails to impress markets, benchmark clock 5 day losing streak

The Indian benchmarks continued the weak streak on closing basis with fifth consecutive red closing on Friday. For the week, Sensex closed down by 2.57 per cent, while the Nifty index was down by 2.61 per cent.

On Friday, Sensex closed 1.14 percent or 434 points down at 37673, which was after clocking 297 points Intra-day gains. The Nifty ended 1.23 percent lower which closed at 11,174.75. Investor sentiment was hit by lack of support from global markets. The US markets saw selling pressure due to rising trade tensions with China. It was also further escalated after US put 10 per cent to 25 per cent tariffs on trades from EU.

On an expected note, the central bank, on Friday, slashed the repo rate by 25 basis points. The repo rate now stands at 5.40 per cent after the latest rate cut. Market sentiment, though, became negative after GPD forecast for FY20E was brought down to 6.1 per cent from earlier estimates of 6.9 per cent in the current fiscal. The monetary policy stance is maintained at ‘accommodative’ which hints at another rate cut.

The markets may continue sideways to the negative tone with Q2FY20 earnings are around the corner.