Market declines due to foreign investor selling, weak quarter earnings
At the close, the Sensex fell by 1.2 per cent or 942 points to 78782.24, while the Nifty dropped 1.27 per cent or 309 points to 23995.35.
Domestic equity benchmark Sensex rallied over 500 points in afternoon session on Thursday after the RBI maintained an accommodative stance to support the coronavirus-hit economy.
The central bank opted for a status quo and left interest rates unchanged at the latest monetary policy meet.
In the afternoon, the BSE Sensex was trading 530.90 points or 1.41 per cent higher at 38,194.23 points while the NSE Nifty surged 124.90 points or 1.13 per cent to 11,226.55 points.
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Tata Steel was the top gainer in the 30-share Sensex pack, rising around 2 per cent, followed by HDFC Bank, Bajaj Finance, HCL Tech, Infosys, Kotak Bank, TCS and Reliance Industries.
M&M, Maruti, Bajaj Auto and Bharti Airtel were among the laggards.
On Thursday, RBI Governor Shaktikanta Das announced the decisions taken by the central bank’s Monetary Policy Committee (MPC).
RBI has left the benchmark repurchase (repo) rate unchanged at 4 per cent.
Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with the RBI.
He said the MPC voted for keeping interest rate unchanged and decided to continue with its accommodative stance to support growth.
According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the pause in policy rates and accommodative stance reflect the central bank’s concern about inflation which it feels has risk on the upside.
The governor’s remarks on the disconnect between the financial market and the real economy is a reflection of the central bank’s concern about the exuberance in the market, he noted.
“The central bank has preferred to play it safe with a pause even while reiterating that further space is available for more monetary action,” he said.
Rupee was trading 6 paise higher against the US dollar at 74.87 in the afternoon.
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