The markets have hit fresh day's low in mid-noon trades on the back of weakness in realty and metal stocks. The BSE benchmark index touched a low of 18,186, and is now down 150 points at 18,207. The NSE Nifty has declined 45 points to 5466.
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(Updated at 1235 hrs)
Range-bound trades in the late morning session gave way to a slip in the markets post the RBI's policy meet announcement, in which the apex bank increased repo and reverse repo rates by 25 basis points.
Post-noon, the markets were trading in the negative, after a knee-jerk reaction to the policy statement. However, the bourses soon recovered, with the Sensex was at 18,267 down 91 points, while the Nifty was down 27 points at 5,484.
After the 25 basis point hike, the Repo rate rose to 6.75%, while the Reverse Repo rate was at 5.75%. The cash reserve ratio (CRR) was kept unchanged.
The RBI projected a March-end inflation figure of 8%, and maintained a hawkish and concerned outlook on the economy, in the face of an uncertain and mixed global scenario.
The policy statement said investment momentum may be slowing down, and a risk to growth is emerging. IIP continues to be volatile, and credit growth was seen moderating since December 2010.
In the face of upside risks to inflation owing to rising crude prices and demand-side pressures, the RBI is likely to persist with its current anti-inflationary stance.
Gainers on the Sensex were Reliance Communications at Rs 106 up 3%, BHEL at Rs 1,961 up 2% and HDFC Bank at Rs 2,204 up 1%.
Losers on the benchmark were led by MAruti Suzuki at Rs 1,190 down 3%, HDFC at Rs 647 and Hindalco Industries at Rs 200 both down 2%.
The broader markets were flat with a negative bias; the Mid-cap index was at 6,553, while the Small-cap index was at 7,896.
Capital goods stocks were in the limelight, and the index was up nearly 1% at 12,583, while the Consumer Durables index was up 0.4% at 5,880. Havells India at Rs 64 up 3% was the top gainer amongst the capital goods stocks, followed by BHEL at Rs 1,962 and Crompton Greaves at Rs 269 both up 2%.
Rate sensitives banking, realty and auto were in the red after the rate hike. The Bankex was down 0.3% at 12,406, Realty was at 2,097 down 0.4% and Auto was at 8,728 down 0.5%.
In the banking space, Bank of India was the major loser down 3% at Rs 452. Axis Bank at Rs 1,301 and ICICI Bank at Rs 1,015 were the other significant losers both down 1%. Sunteck Realty at Rs 314 and DLF at Rs 223 both down 2%, along with HDIL at Rs 158 down 1% were the top losers in the realty arena. Significant losers on the auto index were Maruti Suzuki at Rs 1,190 down 3%, Exide Industries at Rs 134 and Apollo Tyres at Rs 67 both down 2%.
IT stocks were the laggards in trade; the index was down 1% at 6,109. IT stocks lagging in trade were Infosys at Rs 2,996, MphasiS at Rs 395 and HCL Technologies at Rs 459 all down 1%.
