Sensex declines 160 pts on RBI's 'hawkish' policy stance

The BSE benchmark Sensex today fell by 160 points on profit-booking in interest-sensitive banking, auto and realty stocks as RBI adopted a "hawkish" stance in its monetary policy 2013-14 that overshadowed its 0.25% cut in repo rate.

In a highly volatile trade, the BSE benchmark Sensex on Friday fell by 160 points on profit-booking in interest-sensitive banking, auto and realty stocks as RBI adopted a "hawkish" stance in its monetary policy 2013-14 that overshadowed its 0.25% cut in repo rate.

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Snapping three days of gains, the Sensex fell by 160.13 points, or 0.81%, to 19,575.64. The index had gained 449 points in the last three sessions.

Similarly, the Broad-based National Stock Exchange index Nifty fell by 55.35 points, or 0.92% to 5,944 points after touching a low of 5,930.15.

The Reserve Bank today cut the key interest rate by just 0.25% to 7.25% and kept the liquidity enhancing cash reserve requirement unchanged, disappointing the industry and stock market.

Brokers said interest-related stocks of bank, auto and realty sectors suffered losses on fresh selling after the RBI said assessment of growth-inflation dynamics limits scope for further easing of policy rate. They said the bank holding CRR unchanged overshadowed the 0.25% cut in key rates.

The banking sector index suffered the most by losing 2.40% to 14,183.60 as ICICI Bank, SBI, HDFC Bank and Housing Development Finance Corp suffered heavy losses on profit-booking.

The auto sector was second worst performer by losing 1.50% to 10,831.43 as stocks of Tata Motors, Maruti Suzuki, Hero MotoCorp and Bajaj Auto lost substantial ground.

The realty sector fell by 1.39% to 1,902.66, and consumer durable index by 1.06% to 7,421.56.

In 30-BSE index components, 18 stocks declined led by GAIL India, Cipla, ITC, ONGC and TCS.

However, a gain in Infosys, Sterlite Industries, Hindalco, Jindal Steel, RIL , Sun Pharma and L&T, saved the market from any major fall.