Markets have turned volatile with the Sensex trading up 63 points at 17,214. Nifty is up 13 points at 5,239. The Sensex had earlier touched a low of 17,103 before rebounding to a high of 17,373.
BSE bankex dropped 0.2% to 12,001 after RBI's monetary policy review. The Reserve Bank of India (RBI) cut interest rates today for the first time in three years by an unexpectedly sharp 50 basis points to give a boost to flagging economic growth but warned that there is limited scope for further rate cuts.
The RBI cut its policy repo rate to 8%, compared with market and expert expectations for a 25 basis point cut.
"Banks are favourably placed currently as there is ease in Inflation. Further, with this 50 bps rate cut, they have been given some relief on the liquidity front. The interest rate cut has arrested the declining growth while keeping the Inflation numbers under control. The RBI will try to make sure that liquidity is available in the system, which will lead to further rate cuts in the coming months," said Deven Choksey, MD, KR Choksey Securities.
Meanwhile, Asian markets traded in the negative zone. Hang Seng dropped 0.7% while Shanghai Composite slipped 1%. Nikkei was flat but Taiwan Weighted slumped nearly 2%.
BSE consumer durables index was down over 1% at 6,598. Meanwhile, PSU index added 0.8%, followed by metala nd realty indices.
Coal India is the biggest gainer among Sensex stocks - up 2.7% at Rs 349. ONGC, DLF, Hero MotoCorp and NTPC have added 1-2% each. Among other gainers are TCS, Sun Pharma, Cipla and Sterlite.
However, several auto shares have dropped into the red. Mahindra & Mahindra has dropped 1% to Rs 681, followed by Maruti Suzuki and Tata Motors. Market heavyweight - Reliance Industries is down 0.5% at Rs 745.
BSE market breadth is neutral with 1,291 shares on the declining side while 1,252 shares on the advancing side.
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