Sensex, Nifty turn volatile as RBI maintains neutral monetary policy stance while cutting repo rate by 25 bps to 6%

Mumbai: Domestic benchmark equity indices turned volatile in afternoon trade on Thursday after the RBI cut repo by 0.25 percent for the second time in a row, but kept the policy stance at ’neutral’ amid uncertainty over monsoon. The 30-share index fell 160.45 points to 38,716.67 in a knee-jerk reaction at noon, but pared all losses, and was trading 22.24 points, or 0.06 percent, higher at 38,899.36 at 1230 hours. Similarly, the NSE benchmark Nifty was trading marginally higher at 11,643.40. [caption id=“attachment_4433821” align=“alignleft” width=“380”] Representational image. Reuters[/caption] Top gainers in the Sensex pack were Hero MotoCorp, Bharti Airtel, Asian Paints, NTPC, Tata Motors, HDFC, Bajaj Auto, Vedanta and Axis Bank, rising up to 1.92 percent. While HCL Tech, Yes Bank, Tata Steel, RIL, ONGC, IndusInd Bank, TCS, ICICI Bank, M&M, Infosys, HDFC Bank, ITC and SBI shed up to 2.43 percent. Interest rate sensitive stocks - banking, realty and auto - witnessed mixed trend following the Reserve Bank of India (RBI) rate cut announcement. The BSE auto index was trading at 19,241.02, up 77.92 points or 0.41 percent, and the BSE realty index gained 0.81 percent at 2,123.97. The BSE bankex, on the other hand, was hovering around 33,735.77, down 112.23 points or 0.33 percent. In an attempt to propel the economy ahead of the general elections, the RBI Thursday lowered the benchmark interest rate by 0.25 percent, the second cut in a row, to the lowest level in one year on softening inflation. The central bank, however, kept monetary policy stance ’neutral’ amid uncertainty over monsoon. It also lowered GDP growth forecast for the 2018-19 to 7.2 percent from 7.4 percent predicted in February policy. Market sentiment was also subdued after foreign investors turned net sellers in the previous trading session, traders said. Foreign institutional investors (FIIs) pulled out Rs 1,040.48 crore Wednesday, and domestic institutional investors (DIIs) sold equities to the tune of Rs 80.83 crore, provisional data available with stock exchanges showed.