Sensex, Nifty close in red after RBI keeps rate unchanged

Sandhya Dangwal
BSE Sensex ended in red as it fell 63 points at 29,911.37 after RBI policy meet while National Stock Exchange index Nifty dropped by 21.55 points or 0.23 per cent to 9,243.60.

Mumbai, April 6: BSE Sensex on Thursday ended in red as it fell 63 points at 29,911.37 after RBI policy meet.  The 30-share index had lost about 122 points in the opening trade on Thursday as it quoted 62.87 points, or 0.21 per cent lower at 29,911.37 soon after the RBI announced its first bi-monthly monetary review of this fiscal. Meanwhile, National Stock Exchange index Nifty dropped by 21.55 points or 0.23 per cent to 9,243.60. The BSE banking index , however, was trading little changed at 24,711.29 points on Thursday.

The brokers were of the opinion that the RBI’s decision to keep key interest rate unchanged was largely in line with investor expectations. Rate sensitive stocks such as banks, real estate stocks rallied after the Monetary Policy Committee (MPC) decided to keep the policy rates and cash reserve ratio (CRR) unchanged. The policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 percent. The reverse repo rate under the LAF is at 6.0 percent, and the marginal standing facility (MSF) rate and the Bank Rate are at 6.50 percent.

The central bank also projected the GDP growth for the current fiscal at 7.4 per cent, up from 6.7 percent in 2016-17. RBI also projected inflation at 4.5 percent for the first half of 2017-18. Around 3 PM, BSE Sensex traded lower by 82 points, or 0.27%, to 29,892, while the Nifty 50 falls 28 points, or 0.31%, to 9,237. The Reserve Bank of India (RBI) has pulled surprises at its last three policy meetings, analysts uniformly expect no change in interest rates.

On Thursday, the rupee opened at 65.05 a dollar. At 9.15am, the home currency was trading at 65.06, down 0.27% from its Wednesday’s close of 64.88. Meanwhile, the Aditya Birla Money Ltd shares hit 20% upper circuit for the second consecutive sessions. The RBI on Thursday allowed banks to invest in real estate investment trusts (REITs) as well as infrastructure investment trusts (InvITs). Moneycontrol reported that due to this move, DLF, Prestige Estates, Unitech, and Godrej Properties, among others surged between 1 and 6 percent intraday.