Sensex drops 180 pts: RBI's repo rate cut fails to enthuse investors as profit-taking sets in
Traders said the RBI's decision to lower the policy rate to 6 percent failed to boost sentiment
Mumbai: Benchmark Sensex retreated sharply post the RBI's policy announcement and tumbled 180 points to hit a low of 32,395. The Reserve Bank cut repo rate by 25 bps, which was in line with market expectations.
Traders said the RBI's decision to lower the policy rate to 6 percent failed to boost sentiment.
This is the first rate cut since October 2016 and the interest rate is now at a 6-year low.
They added that no change in cash reserve ratio (CRR) too had a bearing.
The 30-share index, which had retreated from record highs in late morning trade, was trading down 98 points at 32,477, soon after the RBI announced its bi-monthly monetary review.
The barometer had touched an all-time high of 32,686.48 (intra-day) in the opening trade.
The wider index Nifty too slipped from a record high by falling 45.95 points, or 0.45 percent, to 10,068.70. The gauge had touched an all-time high of 10,137.85 at the outset today.
In the wake of record low retail inflation, the monetary policy committee (MPC) headed by RBI Governor slashed policy repo rate by 25 basis points to 6 percent and reverse repo by a similar proportion to 5.75 percent.
The central bank also retained the growth forecast at 7.3 percent for the current fiscal.
The banking index, however, was marginally up by 0.14 percent as shares of state-run SBI rose 0.24 percent, Axis Bank 0.77 per cent and ICICI Bank 0.25 percent.
However, the BSE realty index was 0.27 percent down while auto shed 0.16 percent.
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