Stock markets fell sharply in afternoon trades after the Reserve Bank of India kept its key repo rate unchanged at 6.25 per cent dashing the hopes of stock market analysts who were anticipating a 25 basis point cut in key rates.
The Sensex which rose as much as 150 points and Nifty which touched high of 8,190.45 on hopes of a rate cut came under sharp selling and Sensex fell 376 points from intraday high and Nifty fell 113 points from day's highest point.
Interest rate sensitive banking and real estate shares fell sharply while auto stocks came off the intraday highs. The Bank Nifty index declined 0.8 per cent and Real Estate index declined 0.92 per cent.
Apart from rate sensitive shares, FMCG, capital goods, IT, pharma and consumer durable shares were also witnessing selling pressure.
From The Nifty basket of shares, 39 were trading lower while 12 were advancing.
Sun Pharma was the top Nifty loser, down 6 per cent to Rs 665 after India's biggest drug maker said that the US health regulator has informed the company of more concerns found at its Halol manufacturing plant after a recent inspection.
Bank of Baroda, TCS, Tata Steel, ICICI Bank, Lupin, Axis Bank, HDFC Bank, State Bank of India, Maruti Suzuki, ITC, Reliance Industries and Ambuja Cements were also among the laggards. While, Eicher Motors, BPCL, HDFC and Infosys were among the notable gainers.
As of 3:00 p.m., the Sensex was down 144 points at 26,249 and Nifty was at 8,105, down 38 points.