RBI policy stance weighs on market

SBI, HDFC Bank and ICICI Bank among the top losers on the Sensex

Markets continue to trade on a weak note in afternoon deals after the Reserve Bank of India decided to keep the key rates unchanged dashing the hopes of a rate cut which the analysts were expecting given the slowdown in the economic growth.

The Sensex has shed 168 points at 16,781 and the S&P CNX Nifty is down 56 points at 5,084 levels. Earlier in the day, the markets opened higher tracking firm global cues after Greeks voted in favour of the pro bailout party. The Sensex touched the intra-day high of 17,101 levels.

Meanwhile, the European markets have opened on a firm note. CAC 40, DAX and FTSE are up 1% each.

In Asia, the markets ended higher with Hang Seng, Nikkei and Shanghai Composite gaining 0.4-1.7% each.

Back home, RBI, in its mid-quarterly review of the monetary policy said the future action would depend upon on external factors, domestic developments and inflationary risks.

"Future actions will depend on a continuing assessment of external and domestic developments that contribute to lowering inflation risks," RBI said.

Rate sensitive stocks are the worst hit in trades so far. State Bank of India is the top loser among the Sensex stocks, down 3% to Rs 2,118. HDFC Bank, ICICI Bank, Tata Power, BHEL, Maruti Suzuki, HDFC and NTPC from the rate sensitive pockets are also  among the top losers. On the other hand, Tata Steel, Tata Motors, Bajaj Auto and Coal India are among the notable gainers.

Selling pressure is visible across the board. The BSE bankex is the top loser on the sectoral front, the index has slipped 2.4% or 282 points to 11,304 levels. Oil & gas, capital goods, FMCG, healthcare, metal and IT indices are also trading weaker by 0.3-1% each.

Among the individual stocks, Allacargo Logistics is trading firm up 7% at Rs 135 in otherwise weak market, on announcing buyback of its own equity shares from the public shareholders.

The broader markets are also trading on a weak note. The BSE mid-cap index is down 35 points at 5,923 and the small-cap index has shed 19 points to 6,332 levels.