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Sensex falls over 100 pts; RBI keeps policy rates unchanged

12:00

The News International Team

12:15pm Expert view on RBI policy

The Reserve Bank of India Tuesday sounded a dovish note on its outlook for inflation, but the policy statement highlights some of the hurdles in the path of economic growth. Inflation may be easing, but growth is still not a given, is the impression one gets from a close reading of the document. Also, it could still take another quarter before RBI can a claim a decisive victory over inflation and lower interest rates.

12:00pm Market Check

Equity benchmarks remained under pressure after the RBI maintained status quo by keeping policy rates unchanged. But experts looked more hopeful of rate cut likely in April (especially after Budget) as RBI governor Raghuram Rajan says monetary policy stance may change in early 2015 if inflation eases.

According to the apex bank, over the next 12-month period, inflation is expected to retain some momentum and hover around 6 per cent, except for seasonal movements, as the disinflation momentum works through. Accordingly, the risks to the January 2016 target of 6 percent appear evenly balanced under the current policy stance, says the RBI.

The 30-share BSE Sensex slipped 131.79 points to 28427.83 and the 50-share NSE Nifty fell 40.60 points to 8515.30. About 1077 shares have advanced, 1415 shares declined, and 105 shares are unchanged on the Bombay Stock Exchange.

Mahindra & Mahindra topped the selling list, falling 3 percent followed by HDFC, Infosys, HDFC Bank, Tata Motors, Bajaj Auto and Dr Reddy’s Labs with 1-2 percent loss. State Bank of India, Axis Bank, Maruti Suzuki, TCS, BHEL and Hero Motocorp declined marginally.
 
However, L&T, ITC, Sesa Sterlite, Bharti Airtel, ONGC, Sun Pharma, NTPC, Hindalco and Tata Steel bucked the trend, up 0.2-1.5 percent.

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