Indian benchmark indices end lower on Wednesday
According to experts, the market, which closed higher on Tuesday had anticipated the 25 basis point repo rate cut and had factored in the same.
On Wednesday, BSE Sensex was down 98.43 points at 32476.74 and NSE Nifty was down 33.15 points at 10081.50.
The MPC cut the repo rate, the rate at which the RBI lends money to commercial banks, by 25 basis points to six per cent on Wednesday.
The RBI in its release said that on the basis of an assessment of the current and evolving macroeconomic situation, the MPC decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.25 per cent to 6.0 per cent with immediate effect.
It is expected that the rate cut will trigger hope of lower borrowing costs for households, and companies ahead of the festival season, according to media reports.
Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.25 per cent.
The RBI said that the decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.
Dr. Chetan Ghate, Dr. Pami Dua, Dr. Viral V. Acharya and Dr. Urjit R. Patel were in favour of the monetary policy decision, while Dr. Ravindra H. Dholakia voted for a policy rate reduction of 50 basis points and Dr. Michael Debabrata Patra voted for status quo. The next meeting of the MPC is scheduled on October 3 and 4, 2017.
Top gainers on Wednesday included NTPC, Ambuja Cements, Hero Motocorp, Adani Ports, ACC, Lupin and Reliance while BHEL, Sun Pharma, Dr Reddy;s Labs, Tata Motors, Bharti Infratel, Infosys and TCS declined.
Image: Wikiemdia commons
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