Nifty slips below 5,400 after RBI keeps rates unchanged

Key share indices have touched intra-day lows on selling pressure in bank shares after a cautious stance by  the Reserve Bank of India keeping key policy rates unchanged as inflation risks remain.

"Notwithstanding the deceleration in growth, inflation risks remain, which will influence both the timing and magnitude of future rate actions," the RBI said in its mid-quarter review statement.

“On the basis of the current macroeconomic assessment, it has been decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.75% of their net demand and time liabilities; and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.5%,” RBI said in its mid-quarter monetary policy review: March 2012.

The Sensex was down 141 points at 17,778 after touching an intra-day low of 17,726 and the Nifty was down 49 points at 5,415 after touching an intra-day low of 5,398 so far.

Among the sectoral indices, the BSE Bankex, Consumer Durables, Realty and Auto indices were down 1-2% each.

Bank shares were among the top losers among Sensex stocks with ICICI Bank, HDFC Bank, SBI and HDFC all down 1-2% each.

Among capital goods shares, BHEL was down 2.8% and L&T slipped 1.3%. Index heavyweight Reliance Industries was down 1.1%.

In the broader market, the BSE Mid-cap index was down 1% and the small-cap index slipped 0.6%.

Among other shares, Man Industries (India) has rallied 3% to Rs 123 after the company announced a strategic partnership with the Japanese steel maker, Kobe Steel.

Aban Offshore was down 1.5% at Rs 494 despite the company stating that it has redeemed bonds worth of $170 million or about Rs 835 crore on due date.

Mangalore Chemicals and Fertilizers has surged 7% to Rs 43 on reports that Mangalore Refinery and Petrochemicals (MRPL) is interested to acquire promoter’s stake in the company.

Tour operator Thomas Cook has received at least eight bids, including from private equity firms Kohlberg Kravis Roberts and Carlyle Group, for buying the company's stake in its Indian unit, the Business Standard reported on Thursday.The stock was up 4% at Rs 64.

Stocks of companies in the railways business continued to decline and fell by up to 6% on bourses after yesterday's Rail Budget, which did not provide them any major direct benefits.

Shares of Kalindee Rail Nirman (Engineers) plunged 5.38% to touch a low of Rs 99.20, while wagon maker Texmaco Rail and Engineering tanked 4.26% to Rs 64.

Kernex Microsystems tumbled by 5.47% and Titagarh Wagons was down 3.38%. Bharat Earth Movers also fell by 1.16%, while Bartronics India lost 1.39%.

The broader market was weak with 1,505 losers and 794 gainers on the BSE.