Sensex drops almost 300 points; rate-sensitives drag

Benchmark indices have slipped further and are witnessing extreme selling pressure weighed down by rate-sensitive sectors, mainly financials after the RBI at its monetary policy review signaled that further rate cuts could be delayed.

The RBI has reduced the repo rate by 25 bps to 7.25% and kept the CRR unchanged at 4%.

At 12:16PM, the 30-share Sensex was down 282 points at 27,567 and the 50-share Nifty was down 84 points at 8,349.

The top losers on the Sensex are Hero Moto, HDFC, ITC, Wipro and SBI, all slumping between 2-3.3%.


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Updated at 11:25

Markets have extended losses and are trading near their day’s lows with financials leading the decline after the RBI at its monetary policy review signalled that further rate cuts could be delayed.  

The RBI has reduced the repo rate by 25 bps to 7.25% and kept the CRR unchanged at 4%.

At 11:25AM, the 30-share Sensex was down 285 points at 27,564 and the 50-share Nifty was down 86 points at 8,347.

Among broader markets, BSE Midcap and Smallcap indices are down 0.3-0.6%.

The market breadth is negative. Out of 2,256 stocks traded on the BSE, there were 818 advancing stocks as against 1,342 declines.

In the currency front, the rupee trimmed its initial gains and was down by 2 paise to 63.72 per dollar in late morning deals on dollar demand from importers on the back of higher dollar overseas.

RBI POLICY

The Reserve Bank of India on Tuesday cut the benchmark rate by 25 basis points to 7.25%. Both CRR and SLR rates have been left unchanged.

"The policy today is neither conservative nor aggressive," RBI Governor Raghuram Rajan said at a press conference today, calling the policy move a "Goldilocks policy, just right".

"Banks have started passing through some of the past rate cuts into their lending rates, headline inflation has evolved along the projected path, the impact of unseasonal rains has been moderate so far, administered price increases remain muted, and the timing of normalisation of US monetary policy seems to have been pushed back," the RBI said as part of its rationale for the rate cut.

RATE- SENSITIVE SECTORS

Shares of rate-sensitive sectors with banks emerging as the top losers after the Reserve Bank of India at its monetary policy review today signalled that it would await data on monsoon forecast and track inflation before any further rate cuts.

BSE Bankex has slipped over 1%. Auto and Realty sectors are also witnessing selling pressure. Bank Nifty has dropped around 2% at 18,428 levels.

From the financial space, HDFC, SBI, HDFC Bank, Axis Bank and ICICI Bank have plunged between 0.6-2.2%.

Among Realty pack, Prestige Estates, Indiabulls Real, Godrej Properties, Sobha Developers, Unitech and DLF have slipped between 1-2%.