The key benchmark indices settled with modest losses since profit booking materialize after the RBI cut policy rate by 25 bps after a monetary policy meet today, in line with market expectations. The BSE Sensex, declined 98.43 pts or 0.3% at 32,476.74, while the Nifty50 index lost 33.15 pts or 0.33% at 10,081.50. Weakness in European stocks also increased on sentiment.
Adani Ports, NTPC and Ambuja Cements gained the most on Sensex and Nifty, while Dr Reddy’s, BHEL and Indiabulls Housing were the top laggards. Bank stocks were declined after the RBI cut policy rate by 25 bps.
The monetary policy committee (MPC), headed by new RBI governor Urjit Patel, was of focus today. The govt and RBI have set a retail inflation target of 4 percent for the coming 5 years with an upper tolerance level of 6 percent and lower limit of 2 percent. Consumer price index moderated sharply to 1.54 percent in June. It is expected that the RBI will cut interest rates to push spending and investment.
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