Sensex Falls Over 150 Points, Nifty Below 8,600 as RBI Maintains Status-quo

Sensex fell in the afternoon deals after the Reserve Bank of India at its monetary policy review decided to maintain the status-quo by holding the benchmark interest rate (repo rate).

 

The 50-share Nifty fell below its important psychological level of 8,600 following this development.

 

Reserve Bank Governor Raghuram Rajan on Tuesday held repo rate unchanged at 7.5 per cent, as expected. A status quo on interest rate was anticipated because Dr Rajan had earlier this year announced back-to-back repo cuts, both times outside the policy meetings.

 

Another key ratio, the CRR or cash reserve ratio, which is the amount of deposits lenders must keep with the RBI, was also left unchanged at 4 per cent. This means interest rates on home and auto loans are unlikely to come down immediately, analysts said.

 

Meanwhile, the central bank has projected that the Inflation will remain below its 6 per cent target for FY16.

 

Interest rate sensitive stocks like banking, real estate and auto fell on Tuesday after the Reserve Bank of India held key lending rate (repo rate) at 7.5 per cent.

 

The Bank Nifty fell as much as 1 per cent, CNX Auto, NSE's benchmark index for auto companies fell nearly half a per cent, and the realty index of National Stock Exchange, CNX Realty fell over 2 per cent. IDFC, Tata Motors and DLF were among the top losers.

 

Selling pressure was also seen in FMCG, healthcare and power stocks primarily on account of profit-booking.

 

From the Nifty-50 basket of stocks, 28 stocks were declining while 21 were advancing. Sun Pharma was the top Nifty loser, down 1.7 per cent to Rs 1,149. Axis Bank, Ambuja Cement, Zee Entertainment, Hero MotoCorp, ICICI Bank, BPCL, BHEL and Bharti Airtel were also among the losers. While, NTPC, HCL Technologies, Sesa Sterlite, GAIL India and M&M were among the gainers.

 

At 12:30 p.m., the Sensex fell 177 points to 28,328 and the Nifty was down 60 points to 8,599.