The benchmark BSE Sensex slipped into negative terrain and plunged almost 228 points to 26,164.82 on selling pressure soon after the Reserve Bank surprisingly kept short-term lending rate unchanged and lowered GDP growth rate to 7.1 percent.
Meanwhile, the NSE Nifty cracked below the 8,100-mark. The Sensex, which gained over 148 points in the early trade, fell by 227.94 points, or 0.86 percent, to 26,164.82 in post RBI policy trade after the central bank maintained the key lending rate at 6.25 percent in its fifth bi-monthly monetary policy review today, the first after demonetisation.
Also read : RBI keeps rate unchanged at 6.25 pc
The gauge had gained 162.10 points in the previous two sessions. Similarly, the NSE index Nifty was trading 65.65 points, or 0.80 percent down at 8,077.50.
The BSE banking index was down 1.91 percent to 26,672.93, while the realty index was quoting lower by 1.34 percent to 1,262.29. Brokers said RBI's surprise decision to keep key interest rate unchanged and lowering GDP growth rate to 7.1 percent, triggered across-the-board selling, pulling down the key indices into negative territory.
RBI Governor Urjit Patel kept the key policy rates unchanged even as the central bank lowered GDP growth rate and short-term disruption in economic activities due to demonetisation. All six members of the Monetary Policy Committee (MPC) voted in favour of status quo.
Also read : Sensex up 77 pts ahead of RBI policy meet
The central bank left the short-term lending rate or repo rate unchanged at 6.25 percent, and the cash reserve requirement at 4 percent. The RBI also lowered the growth estimate at 7.1 percent for 2016-17 from earlier projection of 7.6. RBI Governor Urjit Patel today kept short-term lending rate unchanged even as the central bank lowered GDP growth rate to 7.1 percent and short-term disruption in economic activities due to demonetisation.