Sensex slumps 286 points as RBI cuts growth forecast, Nifty closes below 10,900-mark; rate-sensitive stocks tank

Mumbai: The BSE Sensex slumped 286 points on Wednesday after the RBI slashed the benchmark lending rate but also lowered the growth estimate for the current financial year, underscoring risks to economic revival amid multiple headwinds.

After swinging 494 points in choppy trade, the 30-share index settled 286.35 points or 0.77 percent lower at 36,690.50.

The broader NSE Nifty also fell 92.75 points or 0.85 percent to 10,855.50.

Earlier in the day, the Reserve Bank of India (RBI) cut interest rate by an unusual 35 basis points to a nine-year low of 5.40 percent in an attempt to boost an economy growing at its slowest pace in nearly five years.

This is the fourth successive rate cut by the central bank.

The RBI also reduced its growth projection for the Indian economy to 6.9 percent for the current financial year, from 7 percent forecasted in June, due to a slowdown in demand and investments.

Most rate-sensitive stocks ended on a negative note, with BSE auto, bankex, finance and realty indices cracking up to 2.10 percent.

M&M was the worst performer in the Sensex pack, tumbling 5.62 percent, after the company reported a 52.56 percent decline in consolidated profit after tax to Rs 894.11 crore for the June quarter, hit by lower vehicle sales.

Other laggards included Tata Steel, Tata Motors, SBI, Vedanta, Axis Bank, ITC, RIL, Maruti, L&T, HDFC twins and Kotak Bank, which fell up to 4.75 percent.

On the other hand, HUL, Yes Bank, Hero MotoCorp, IndusInd Bank, Sun Pharma, Tech Mahindra and Infosys rose up to 1.95 percent.

“The downward revision in real GDP from 7 percent to 6.9 percent is likely to affect the short-term sentiment in the markets. Increasing flows to NBFCs will boost credit availability, which in turn is good news for the MSME sector and exporters of all verticals,” said Pushkar Mukewar, co-founder and co-CEO of Drip Capital.

Sectorally, BSE metal, auto, energy, oil and gas, basic materials, realty, bankex, capital goods, finance and telecom indices fell up to 2.67 percent.

Only healthcare, IT and teck ended in the green, spurting up to 0.51 percent.

Broader BSE midcap and smallcap indices too fell up to 0.44 percent.

Globally, the US-China trade tensions dominated sentiments, even as the US softened its trade war rhetoric.

Elsewhere in Asia, Shanghai Composite Index, Kospi and Nikkei ended in the red, while Hang Seng settled a tad higher.

Equities in Europe were trading on a positive note in their respective early sessions.

Meanwhile, the Indian rupee depreciated 2 paise to 70.84 against the US dollar intra-day.

Brent crude futures, the global oil benchmark, slipped 0.54 percent to $58.62 per barrel.