Domestic equity benchmarks BSE Sensex and NSE Nifty turned volatile in afternoon trade on Wednesday after the RBI slashed benchmark lending rate, but lowered the GDP growth estimates for the current financial year.
After swinging nearly 300 points, the 30-share index was trading 20.61 points, or 0.06 per cent, lower at 36,956.24 around noon. The broader Nifty also fell 3.20 points, or 0.03 per cent, to 10,951.45.
The Reserve Bank of India (RBI) reduced the benchmark lending rate by 35 basis points to 5.40 per cent amid concerns over slowdown in economy.
The central bank, after the meeting of rate-setting panel Monetary Policy Committee (MPC), also lowered the GDP growth estimates for the current financial year to 6.9 per cent from its June forecast of 7 per cent.
Rate-sensitive stocks were trading on a mixed note, with BSE bankex, finance and realty indices rising up to 0.53 per cent, and BSE auto index shedding 0.50 per cent.
Top gainers in the Sensex pack were Yes Bank, IndusInd Bank, HUL, Hero MotoCorp, HCL Tech, Bajaj Finance, ICICI Bank, Sun Pharma and Kotak Bank, rising up to 6 per cent.
On the other hand, Tata Steel, M&M, ONGC, ITC, Vedanta, L&T, Axis Bank and Maruti fell up to 3.48 per cent.
"The RBI continued with the rate cut cycle but in a surprise change to the quantum, reduced repo rate by 35 bps. While this induces some uncertainty in market expectations of the quantum of rate changes, it provides the RBI MPC with a greater degree of flexibility in signalling their intent," said Suvodeep Rakshit, Senior Economist at Kotak Institutional Equities.
On the currency front, the rupee too witnessed high volatility and slipped towards 71 level to trade at 70.91 at 1215 hrs, down 10 paise over its last close.
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