Sensex falls 244 pts as RBI disappoints ; banks, realty worst hit

The decision by the RBI to leave key policy rates unchanged did not go down well with investors and this was evident in the steep fall in both the Sensex (-1.4 percent) and the Nifty (-1.37 percent). The Reserve Bank of India kept its policy repo rate unchanged at 8 percent and left the CRR for banks at 4.75 percent, putting the onus on the government to take measures to revive flagging economic growth.

This had a negative reaction on the street which had at least expected a 25 basis cut in repo. The BSE Sensex fell 244 points to close at 16,705, down 404 points from the day’s high. The S&P CNX Nifty also closed 75 points lower at 5,064. The market breadth was negative. On the BSE, 1,681 stocks declined while 1,011 advanced. The rupee also fell to 55.83 on the back of sharp fall in stocks.

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The BSE Midcap (-1.06 percent) and small cap (0.7 percent) also fell. Among sectoral indices, rate sensitive sectors were the worst hit. Bankex declined by 3.16 percent followed by realty (-2.78 percent).

In the 30-share Sensex pack, 28 stocks declined led by a more than four percent fall in SBI and Sterlite Inds. The only two gainers were Tata Steel (1.29 percent) and Bajaj Auto (0.94 percent). Tata Steel gained it made open offer in group companies Tinplate and Tata Sponge Iron.

However, even in these markets, there were some gainers. Nalco was the top performer amongst ‘A’ group stocks after reports that the government plans to sell a 10 percent stake in the company. Motherson Sumi and Strides Arco also rose 1.8 percent.

HCL Tech fell 3.3 percent on reports the company is heading for a major management reshuffle.