The Indian equity benchmarks edged lower after the Reserve Bank of India kept its key interest rates unchanged as widely expected and maintained its accommodative stance to support and revive economic growth. The benchmarks opened higher ahead of the RBI's monetary policy decision and edged lower on account of profit booking after RBI held rates steady. The Sensex fell as much as 334 points from day's highest point and Nifty 50 index touched an intraday low of 15,642.55 after hitting record high of 15,733.60.
As of 11:55 am, the Sensex was down 95 points at 52,138 and Nifty 50 index declined 20 points to 15,670.
The Reserve Bank of India (RBI) has kept the benchmark rates unchanged and "decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target" at a time when the country is battling against the second wave of the pandemic. The central bank has kept the repo rates - the key interest rates at which it lends money to commercial banks - steady at four per cent and the reverse repo rate - the rate at which RBI borrows money from banks, unchanged at 3.35 per cent, the RBI Governor Shaktikanta Das said at the end of the three-day Monetary Policy Committee (MPC) meeting that started on Wednesday.
Meanwhile, rate sensitive banking and financial services shares came under selling pressure after the RBI's decision. Nifty Bank index declined 0.7 per cent, Nifty Financial Services index fell 0.3 per cent and Nifty Private Bank index slipped 0.6 per cent.
On the other hand, select auto, information technology and media stocks were witnessing buying interest.
Mid- and small-cap shares were outperforming their larger peers as Nifty Midcap 100 index rose 0.3 per cent and Nifty Smallcap 100 index advanced 0.5 per cent.
Nestle India was top Nifty gainer, the stock fell nearly 2 per cent to Rs 17,497. Hindalco, Tata Steel, HDFC Bank, ICICI Bank, Hindustan Unilever, Shree Cements, State Bank of India, JSW Steel, Axis Bank, Titan, Dr Reddy's Labs and Bajaj Auto were also among the losers.
On the flipside, ONGC rose 2.5 per cent to Rs 126 following surge in crude price in international markets. Coal India, Indian Oil, Bharat Petroleum, Larsen & Toubro, Tata Consumer Products, Grasim Industries, Tech Mahindra, HDFC and HDFC Life were among the gainers.
The overall market breadth was positive as 1,704 shares were trading higher while 1,242 were declining on the BSE.