Markets plummet as RBI maintains status quo

Mumbai: Equity benchmarks closed lower in topsy-turvy trade on Thursday after the Reserve Bank unexpectedly left interest rates unchanged amid slowing growth.

Citing prevailing inflation pressure and rising food prices, the six-member Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, unanimously voted to hold the key repo rate at 5.15 per cent.

The stock markets, which had opened in the green on rate cut hopes, tumbled after the monetary policy announcement.

Trading sentiment was further dampened after the RBI cut its GDP growth forecast to 5 per cent for 2019-20 from the earlier estimate of 6.1 per cent.

After swinging between gains and losses, the 30-share BSE Sensex finally ended 70.70 points or 0.17 per cent lower at 40,779.59. Similarly, the 50-scrip NSE Nifty settled with a loss of 24.80 points or 0.21 per cent at 12,018.40.

Rate-sensitive auto, bank and real estate counters closed on a flat-to-negative note. In value terms, bank stocks accounted for most of the Sensex losses.

Sectorally, the BSE metal index fell the most, followed by basic materials and energy. Capital goods, IT and tech indices moved higher.

In the broader market, BSE midcap and largecap indices under-performed the benchmark. BSE smallcap index closed almost flat.

The Indian rupee too faced volatility after Reserve Bank's policy decision but later found some stability. The rupee was trading 18 paise higher at 71.35 (intra-day).

Crude oil benchmark Brent Futures rose 0.6 per cent to $63.38 per barrel.

Bankers and economists had widely expected the central bank to cut rates for a sixth time to support a slowing economy.