The S&P BSE Sensex and NSE Nifty 50 Indexes dived on Wednesday after the Reserve Bank of India lowered the GDP growth forecast for current financial year to 6.9 per cent from 7 per cent despite the central bank cutting the interest rate for fourth time in a row to 5.4 per cent, lowest in nine years to spur growth. Market analysts said the rate cut was in line with expectations and participants had priced in a 50 basis point cut. Rate sensitive banking, auto and realty stocks were among the worst hit in today's session.
Amar Ambani, head of research at Yes Securities told Reuters that the market's reaction was largely muted as equity markets had already priced in a potential 50 basis point cut.
The Sensex fell 0.77 per cent or 286 points to close at 36,690 and the NSE Nifty 50 Index declined 0.85 per cent or 93 points to 10,855.
The Reserve Bank of India cut gross domestic product (GDP) growth target for current financial year to 6.9 per cent from 7 per cent in the June policy. The range of GDP growth is projected at 5.8-6.6 per cent for first half of 2019-20, and 7.3-7.5 per cent for second half "with risks tilted to the downside", the Reserve Bank of India said in its third bi-monthly policy statement of the current financial year.
Interest rate sensitive banking, auto and realty shares were among the worst hit in today's trade with the Nifty PSU Bank Index dropping 3.4 per cent. Nifty Bank, Auto, Financial Services and Realty sector gauges also fell between 1-2 per cent each.
On the other hand, Nifty Media Index was top gainer, up 1.9 per cent.
Indiabulls Housing Finance was top losers in the Nifty 50 basket of shares, the stock fell 13 per cent after its net profit declined 24 per cent to Rs 802 crore in June quarter.
Mahindra & Mahindra dropped 6 per cent to fresh 52-week low of Rs 515 after its profit declined worst quarter for passenger vehicles in 18 years.
Tata Steel, Tata Motors, Bharat Petroleum, State Bank of India, UPL and Eicher Motors were also among the losers.
On the flipside, Zee Entertainment, Cipla, Yes Bank, Hindustan Unilever and Hero MotoCorp were among the laggards.
(With inputs from Reuters)
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