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Interest-rate sensitive bank, realty and auto stocks today fell over 3 per cent, after the Reserve Bank of India said that assessment of growth-inflation dynamics limits the scope for further easing of policy rate.
Among the worst-hit were BSE realty index that saw blue-chips like DLF fell 2.01 per cent, HDIL (3.22 per cent), Prestige Estates (2.5 per cent), Godrej Properties (2.15 per cent) and Unitech (2.11 per cent).
The BSE realty index fell 1.75 per cent to 1,895.59, becoming the biggest loser among the 13 sectoral indices.
From the banking space, shares of SBI were down 2.48 per cent, PNB (2.28 per cent), ICICI Bank (1.6 per cent), Canara Bank (2.68 per cent) and HDFC Bank (0.94 per cent).
The BSE banking index slipped 1.62 per cent to 14,296.17.
“RBI has again chosen to be cautious than being completely dovish. A 0.25 per cent cut was already factored in by markets, while a CRR cut could have cheered up investors.
Subbarao’s statement that there is ‘very limited room’ for further easing will play spoilsport for markets ahead.
“The policy clearly shows that the central bank is unlikely to cut rates aggressively this fiscal, if inflation and CAD risks remain,” said Vikas Jain, Founder, Aditya Trading Solutions.
Auto stocks too saw selling with Bajaj Auto trading down 2.12 per cent, Tata Motors (1.69 per cent) and Ashok Leyland (1.09 per cent).
Led by the weakness in these counters, the BSE auto index lost 0.89 per cent to 10,899.03.
Sticking to its cautious stance, RBI today cut the key interest rate by just 0.25 per cent to 7.25 per cent and kept the liquidity enhancing cash reserve requirement unchanged.
The central bank said that assessment of growth-inflation dynamics limits the scope for further easing of policy rate.
The BSE benchmark Sensex was trading 9.15 points down at 19,726.62 in the afternoon trade.
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