BSE Sensex closes marginally lower as RBI holds policy rate

The markets retreated from record highs on Thursday after the Reserve Bank of India (RBI) left the key policy rate unchanged, in line with Street expectations.

The 30-share BSE Sensex stayed in red zone through the session between 29,954 and 29,818, before finishing at 29,927, down 47 points, or 0.16 per cent. 

The National Stock Exchange’s Nifty hit a low of 9,219 before recovering partially to settle at 9,262, still down 3.2 points or 0.03 per cent. It had touched a high of 9,268 and a low of 9,219.

A rally in real estate counters helped both key indices recover from their day’s lows. RBI left its benchmark lending rate unchanged on Thursday at 6.25 per cent for the third monetary policy review in a row, citing upside risk to inflation.

RBI, however, increased the reverse repo rate — which it pays to banks for parking funds with it — by 0.25 per cent to six per cent, narrowing the policy rate corridor. “With no major surprises from RBI, markets stabilised, but will await the NPA (non-performing asset) resolution measures that are widely expected shortly. 

“Q4 numbers should take centre stage from here on but global cues could also hold sway in the coming days, especially with the US markets beginning to show vulnerability ahead of jobs data,” said Anand James, chief market strategist, Geojit Financial Services.