Nifty sheds 33 points as RBI keeps policy rate on hold

Markets witnessed a volatile knee-jerk reaction and retreated from their multi-month highs after the RBI left its monetary policy unchanged amid rising inflationary pressures.
Halting a three-day surge, benchmark Nifty slipped over 33 points today to close below the psychologically-crucial 8,700 barrier as investors preferred to book profits.
A deluge of tepid corporate earnings also impacted sentiment.
As expected, Governor Raghuram Rajan maintained status quo on key rates at his last policy review as inflation hit a two-year high in June due to sharp increases in food prices, posing an upside risks to the Reserve Bank's inflation target of 5 per cent for March 2017.

RBI also retained growth projection for the current fiscal at 7.6 per cent but cautioned that sluggishness in global economy may neutralise India's momentum.
Governor Rajan has lowered rates by 150 basis points since January last year.

Despite a bout of heavy mid-session selling pressure, market recouped some lost ground in fag-end trade on low level buying support.
Elsewhere, major Asian bourses finished firmly higher, underpinned by cooling Chinese inflation data which bolstered stimulus hopes.
European stocks reversed early losses to trade slightly higher amid a retreat in oil prices.
The 50-share Nifty opened modestly higher at 8,727.80 and hovered between 8,728.35 and 8,638.20 before concluding at 8,678.25, revealing a loss of 33.10 points, or 0.38 per cent.

Among the NSE-sectoral indices, Metal dropped 0.86 per cent, followed by FMCG (0.84 per cent), Pharma (0.83 per cent), Auto (0.51 per cent), Energy (0.41 per cent) and Infra (0.36 per cent).
Smallcap and Midcap indices also moved down 0.83 and 0.20 per cent, respectively.
HDFC, IDEA, Lupin, ITC, Eicher Motors, M&M, Grasim, BPCL, Kotak Mahindra, Hero MotoCorp, Power Grid, L&T, HDFC Bank, Aurobindo Pharma, Maruti and Hindalco were among the prominent laggards.
The outperformers included Zee, Infosys, SBI, Bharti Infratel, ONGC, Tata Power, Axis Bank, HUL, Coal India and Reliance.
Turnover in cash segment jumped to Rs 22,298.89 crore from Rs 20,676.69 crore yesterday.

A total of 11,170.70 lakh shares changed hands in 85,97,951 trades. The market capitalisation of NSE stood at Rs 107,42,959 crore.