Raghuram Rajan keeps rates unchanged, Sensex stays in red

Market benchmark BSE Sensex was trading lower by over 126 points at 28,056.56 and the broader NSE Nifty remained below the crucial 8,700-mark after the Reserve Bank kept its key policy rates unchanged on Tuesday.

Citing upside risks to the Reserve Bank’s inflation target for March 2017, RBI Governor Raghuram Rajan today maintained status quo on key rates at his last policy review meeting, as was widely expected, but underlined that the central bank continues to be accommodative.

The 30-share index, which had lost over 55 points in the opening trade, dropped further to quote 126.01 points or 0.44 per cent to 28,056.56 soon after RBI announced its bi-monthly monetary review. The barometer had gained over 485.06 points in the previous three sessions.

The wider National Stock Exchange index Nifty dropped 40.10 points or 0.46 per cent to 8,671.25.

Brokers said RBI’s decision to keep key interest rate unchanged was largely in line with investor expectations.

They added that no change in Cash Reserve Ratio (CRR) too had its bearing.

The BSE banking index was trading little changed at 21,656 points.

On similar lines, the BSE Realty index was quoting 0.35 per cent down at 1,626.62 points.

Among rate sensitive scrips, HDFC Bank was quoting in the negaqtive zone at Rs 1,242  while ICICI Bank up 0.65 per cent at 246.85.

The RBI left the short-term lending rate or repo rate unchanged at 6.50 per cent, and the cash reserve ratio static at 4 per cent. The central bank also retained the GDP projection at 7.6 per cent.