Sensex slumps as RBI leaves rates unchanged

Bond prices and stocks dropped while the rupee weakened against the dollar on Monday after the Reserve Bank of India surprised markets by keeping both the repo rate and the cash reserve ratio unchanged.

The benchmark 10-year bond yield rose 9 basis points to 8.43 percent from levels before the announcement, while the new 10-year bond yield rose about 7 basis points.

The main BSE index erased gains to fall 0.6 percent from before the decision.

The rupee weakened to 55.53 per dollar from around 55.35 before the RBI move.

(Reporting By Mumbai markets team Editing by Subhadip Sircar)