Sensex down 69 points as RBI keeps repo rate unchanged at six per cent

MUMBAI: Market benchmark BSE Sensex was trading lower by about 69 points at 34,127.31 in late afternoon trade after the RBI kept its key policy rate unchanged and lowered economic growth projection for 2017-18.

READ | RBI keeps interest rates unchanged at 6%; reserve repo rate at 5.75 %

The central bank kept the interest rate unchanged, as widely expected on inflation concerns, but lowered economic growth projection to 6.6 per cent for 2017-18, from 6.7 per cent in its sixth bi-monthly Monetary Policy statement today.

The RBI kept the key policy rate unchanged at 6 per cent for the third consecutive time today in view of firming inflation.

The 30-share index, which had bounced over 470 points in the opening trade, was quoting 68.63 points, or 0.20 per cent lower at 34,127.31 soon after the RBI announced its sixth bi-monthly monetary review of this fiscal.

The barometer has lost over 2,087.31 points in the previous six straight sessions.

The wider National Stock Exchange index Nifty dropped 12.40 points or 0.12 per cent to 10,485.85.

Brokers said RBI's decision to keep key interest rate unchanged was largely in line with investor expectations but lowering of economic growth projection dampened sentiments.

The BSE banking index was trading 0.09 per cent down at 29,169.66 points.

However, the BSE realty index was quoting 1.98 per cent higher at 2,411.44 points.

Among rate sensitive scrips, Punjab National Bank, HDFC Bank, Yes Bank, IndusInd Bank and Axis Bank fell up to 1.22 per cent. However, largest lender SBI was up 0.75 per cent.

Following are the highlights of the RBI's 6th bi-monthly monetary policy statement:

• Key lending rate (repo) unchanged at 6 pc;

• Reverse repo rate remains at 5.75 pc and marginal standing facility (MSF) rate and Bank Rate at 6.25 pc;

• Monetary policy's stance neutral;

• Petrol and diesel prices rose sharply in Jan, reflecting lagged pass-through of past increases in global crude prices;

• Retail inflation estimated at 5.1 pc in Q4 this fiscal and 5.1-5.6 pc in H1 of FY2018-19;

• Inflation likely to ease to 4.5-4.6 per cent in H2 of FY19;

• Gross Value Added (GVA) growth for FY18 seen at 6.6 pc;

• GVA growth for 2018-19 projected at 7.2 pc;

• GST stabilising, which augurs well for economic activity;

• Early signs of revival in investment activity;

• RBI seeks pick-up in credit growth due to recapitalisation of PSBs and resolution proceedings under IBC;

• Export growth expected to improve further on account of improving global demand;

• RBI says focus of Union Budget on rural and infrastructure sectors a welcome development;

• Five members voted in favour of status quo in interest rate; one member voted for increase of 0.25 pc;

• Next meeting of the MPC on April 4 and 5.