The Indian markets closed the day on a negative note with the BSE-Sensex closing lower by about 105 points (down 0.4%). The NSE-Nifty closed lower by about 26 points or 0.3%. Barring the realty and FMCG packs, losses were seen across sectors, with information technology stocks being the least in favour. While BSE Mid Cap ended the day on a weak note (down 0.3%), BSE Small Cap stocks closed flat.
Stock markets in other parts of Asia ended the day on a firm note, while sentiments in Europe seemed to be buoyant at the time of writing. The rupee was trading at Rs 61.85 to the dollar at the time of writing.
Banking stocks ended the day on a weak note with Federal Bank and Yes Bank being the top losers. The State Bank of India (SBI) has cut interest rates on retail term deposits by 0.25% today. The new rates will be applicable from next week. As per the bank, term deposits below Rs 1 crore will have interest rates of 8.5% as compared to 8.75% earlier. On the other hand, interest rates on fixed deposits with maturities of five years and above will be brought down to 8.25% from 8.5% currently. As reported by the Mint, this would be lower than the rates offered by India Post and National Savings Certificate offer on five-year deposits.
It may be noted that this is a move that has been followed by other banks as well, given the slowing credit off take. Banks are expected to bring down lending rates as well. The business daily has reported that the Managing Director of HDFC Bank expects interest rates to come down by March 2015. The bank has already cut deposit rates by about 50 basis points or 0.5%.
Stocks of automobile companies ended the day on a weak note, with Ashok Leyland and Hero Motocorp leading the pack of losers. As reported by a business daily, Bajaj Auto is looking to hike prices of two of its models - Platina and Discover - to partially offset the higher input costs; particularly those relating to power and wages. During 1HFY15, the company's revenues were up by 5% while its operating profits grew by only 0.6% with margins falling to 18.3% as compared to 20.2%. The company had last taken a price hike of Rs 1,000 on these models. However, as per the management, it has not gone in for further hikes, something which its peer group companies did do earlier this year. As per the company's management, it will take into consideration any change in the excise duty structure as well as its sales performance before doing so. It may be noted that during the month of November 2014, the Bajaj Auto's sales volumes declined by 6% YoY. In fact, the company's management expects the volume trend to remain subsided in the current month as well.