BSE Sensex slips over 160 pts into negative terrain as RBI holds key rates

The benchmark BSE Sensex pared its early gains to fell by 160 points as interest rate-sensitive stocks slipped after the Reserve Bank Governor Raghuram Rajan kept key repo rates unchanged in its first bi-monthly monetary policy.

The 30-share index, which gained 105.71 points in early trade, fell by 163.50 points, or 0.57 per cent, to 28340.96. The barometer had gained 546.97 points in the previous two straight sessions.

The wide-based National Stock Exchange index Nifty was trading fell by 55.20 points, or 0.64 per cent, to trade at 8604.70 points.

Brokers said the RBI’s decision to keep interest rates unchanged was largely in line with investor expectations.

The BSE banking index fell 0.63 per cent to 21,223.84 with SBI falling by 0.76 per cent, HDFC Bank by 0.11 per cent, Axis Bank by 1.10 per cent and ICICI Bank by 0.81 per cent.

Also, the BSE Realty index was trading 2.17 per cent down at 1,761.09, as shares of DLF Ltd dropped by 2.18 per cent, Unitech by 2.85 per cent, Sobha by 2.93 per cent and HDIL by 1.59 per cent.

In its first bi-monthly policy review for 2015-16, RBI kept the short-term lending rate or repo rate unchanged at 7.50 per cent, and the cash reserve ratio (CRR), which is the amount of deposits parked with RBI, at 4 per cent.

The statutory liquidity ratio (SLR) has also been retained at 21.5 per cent.

The RBI also projected growth rate in 2015-16 at 7.8 per cent, up from 7.5 per cent in 2014-15.

Bombay Stock Exchange - BSE