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Sensex slips, RBI policy eyed

January 23, 2009

The Sensex took a hit on Friday as disappointing corporate results outlook and fading hopes of a rate cut sent it down to its lowest close in two months. The benchmark index dropped 1.5 percent to close at 8,674.

Energy giant Reliance Industries bucked the trend and rose 1.8 percent on lower-than-expected fall in quarterly profit.

Outsourcer Satyam jumped 31 percent. U.S.-listed iGate has told the Satyam board that it is interested in buying the firm.

Financial stocks reeled on worries over rising bad debts ahead of earnings from lenders SBI and ICICI. State Bank of India fell 4.3 percent, ICICI dropped 3.7 percent and HDFC Bank lost 2.2 percent.

Technology shares fell, tracking U.S. markets. TCS and Infosys lost 2.1 percent each, while Wipro dropped 1.7 percent.

Ranbaxy hit a 7½-year low during trade after reporting a net loss for the second consecutive quarter, but recovered later.

The effect of a gloomy earnings season seems to have set in. Tata Steel, SAIL, ONGC, Maruti Suzuki and Tata Motors are among those reporting earnings next week. The automakers are expected to post dismal results.

A government panel has cut its growth forecast for the economy to 7.1 percent for the current fiscal from 7.7 percent, and its chief has said there is room for more cuts in interest rates.

Dampening expectations further is speculation that the Reserve Bank of India (RBI) will keep key interest rates unchanged at its policy review on Tuesday, the day markets open. Do you think the central bank will take steps which will help the Sensex?

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