Sensex slips 47 pts as RBI holds policy rate

Markets retreated from their record highs today after the Reserve Bank left the key policy rate unchanged, in line with Street expectations.

The 30-share BSE Sensex stayed in the red zone throughout the session, shuttling between 29,954.25 and 29,817.59, before finishing at 29,927.34, down 46.90 points, or 0.16 per cent.

The wider NSE Nifty hit a low of 9,218.85 before recovering partially to settle at 9,261.95, still down 3.20 points or 0.03 per cent. It had touched a high of 9,267.95 and a low of 9,218.85 intra-day.

A rally in real estate counters helped both the key indices recover from their day's lows. The Reserve Bank left its benchmark lending rate unchanged at 6.25 per cent for the third monetary policy review in a row today citing upside risk to inflation.

RBI however increased the reverse repo rate -- which it pays to banks for parking funds with it -- by 0.25 per cent to 6 per cent, narrowing the policy rate corridor. The central bank also raised the growth forecast for the current fiscal to 7.4 per cent from 6.7 per cent in 2016-17.

"With no major surprises from RBI, markets stabilised, but will await the NPA resolution measures that are widely expected shortly.

"Q4 numbers should take centre stage from here on, but global cues could also hold sway in the coming days specially with US markets beginning to show vulnerability ahead of jobs data," said Anand James, Chief Market Strategist, Geojit Financial Services Ltd.

Meanwhile, foreign portfolio investors (FPIs) remained net buyers on the domestic bourses, snapping up shares worth a net Rs 340.13 crore yesterday, as per provisional data released by the stock exchanges.

A total of 17 scrips in the 30-share Sensex pack ended lower while 13 closed higher. The BSE realty index emerged the top sectoral gainer, rising 2 per cent as shares of DLF, Unitech, Prestige Estates, Oberoi Realty, Sobha Ltd and Godrej Properties rose by up to 4.48 per cent

Among other rate-sensitive counters, SBI tumbled 1.35 per cent while ICICI Bank fell 1.40 per cent. HDFC rose 0.47 per cent. Broader markets were mixed, with small-cap index falling 0.23 per cent while mid-cap rising 0.15 per cent.

Among BSE sectoral indices, FMCG slumped 0.79 per cent, followed by consumer durables (0.64 per cent), healthcare (0.63 per cent), capital goods (0.21 per cent), bank (0.21 per cent) and auto (0.08 per cent).

However, the market breadth remained positive as 1,469 stocks ended higher, 1,413 declined, while 137 ruled unchanged. The total turnover fell to Rs 3,600.82 crore from yesterday's closing level of Rs 4,390.72 crore.

Global cues were lower as well. Federal Reserve minutes suggested the US central bank was considering steps that could result in a further tightening of monetary policy.

In the Asian region, Japan's Nikkei ended 1.40 per cent lower, while Hong Kong's Hang Seng shed 0.52 per cent. China's Shanghai Index, however, rose 0.33 per cent.

European markets too were trading in the negative terrain in their early deals. Frankfurt's DAX 30 fell 0.41 per cent while Paris CAC 40 was down 0.07 per cent in their early deals. London's FTSE shed 0.49 per cent.