Sensex cuts down losses after RBI holds rate

Mumbai: The benchmark BSE Sensex trimmed its early losses, but is still quoting over 38 points down as interest rate-sensitives remained weak after the Reserve Bank kept key repo rate unchanged in its monetary policy. The 30-share index was down 36.52 points, or 0.13 per cent, 28,150.54 at 1154 hrs. The barometer had dipped below the 28,000-mark to touch a low of 27,963.71 in late morning trade ahead of the RBI policy. The gauge had gained 723.85 points in the previous four straight sessions.

The wider NSE Nifty was trading lower by 2.10 points, or 0.02 per cent, at 8,540.95 after slipping below the 8,500-mark before the policy. Brokers said RBI's decision to keep interest rate unchanged was largely in line with investor expectations.

The BSE banking index fell 0.50 per cent to 21,603.03, with ICICI Bank slumping 0.22 per cent, while HDFC Bank declined 0.18 per cent. In its bi-monthly policy review today, RBI kept the short-term lending rate, or repo rate, unchanged at 7.25 per cent and the cash reserve ratio (CRR), the amount of deposits lenders park with RBI, at 4 per cent. RBI also retained growth target at 7.6 per cent for 2015-16. It has cut rate thrice so far in 2015 by 25 basis points each. The central bank was widely expected to maintain status quo today, according to stock brokers.