Sensex cracks 554 points after RBI announcement; Nifty ends below 11,850
TIMESOFINDIA.COM | Jun 6, 2019, 15:39 ISTHighlights
- On BSE, major laggards include IndusInd Bank, Yes Bank, State Bank of India, L&T and Tata Steel with their stocks falling as much as 6.74 per cent
- 23 out of 30 stocks finished in red on the BSE index
(Representative image)NEW DELHI: Markets on Thursday plunged after the Reserve Bank of India (RBI) reduced repo rate - the rate at which it lends to banks - by 25 basis points (bps). The benchmark BSE sensex crashed 554 points or 1.38 per cent to close at 39,530, while the broader NSE Nifty cracked 178 points or 1.48 per cent to settle at 11,844.
Financial stocks tanked the most on both BSE and NSE platforms. On BSE, major laggards include IndusInd Bank, Yes Bank, State Bank of India, L&T and Tata Steel with their stocks falling as much as 6.74 per cent. 23 out of 30 stocks finished in red on the BSE index.
On NSE, all the sub-indices witnessed losses with Nifty PSU Bank and Bank sliding as much as 4.90 per cent.
According to traders, investor sentiment took a hit after the RBI lowered its benchmark lending rate to nearly a nine-year low of 5.75 per cent.
Slashing benchmark lending rates for the third time this year, the RBI said its future monetary policy stance will be more accommodative.
"RBI reduced repo rate by 25 bps as expected. The change in stance to ‘accommodative' was a bit of a surprise. Debt markets will take this as a significant positive move though most of the rate cut cycle is probably over," Suvodeep Rakshit, senior economist, Kotak Institutional Equities told news agency PTI.
"The tone of the RBI policy was dovish and highlights the concerns on growth. We maintain our call for another 25 bps rate cut in August factoring in the benign inflation trajectory and the growing concerns on growth," Rakshit added.
The central bank's decision to remove charges on NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement System) transactions also pulled the markets lower.
Financial stocks tanked the most on both BSE and NSE platforms. On BSE, major laggards include IndusInd Bank, Yes Bank, State Bank of India, L&T and Tata Steel with their stocks falling as much as 6.74 per cent. 23 out of 30 stocks finished in red on the BSE index.
Loans may become cheaper as RBI cuts repo rate for third time in a row
The Reserve Bank of India (RBI) on Thursday reduced repo rate by 25 basis points (bps) to 5.75 per cent. This is the third straight reduction in the rates in 2019. The last time the RBI moved this quickly to lower rates was in 2013 to revive the moribund economy from growth rates that had slipped to a decade low. The move will likely bring down the loan EMIs.
On NSE, all the sub-indices witnessed losses with Nifty PSU Bank and Bank sliding as much as 4.90 per cent.
According to traders, investor sentiment took a hit after the RBI lowered its benchmark lending rate to nearly a nine-year low of 5.75 per cent.
Slashing benchmark lending rates for the third time this year, the RBI said its future monetary policy stance will be more accommodative.
RBI cuts rates by 25 bps: Here's what experts said
The Reserve Bank of India cut its policy interest rate by 25 basis points in a widely expected move on Thursday, while also changing its monetary policy stance to "accommodative" after the economy grew at its slowest pace in over four years in the January-March quarter.
"RBI reduced repo rate by 25 bps as expected. The change in stance to ‘accommodative' was a bit of a surprise. Debt markets will take this as a significant positive move though most of the rate cut cycle is probably over," Suvodeep Rakshit, senior economist, Kotak Institutional Equities told news agency PTI.
"The tone of the RBI policy was dovish and highlights the concerns on growth. We maintain our call for another 25 bps rate cut in August factoring in the benign inflation trajectory and the growing concerns on growth," Rakshit added.
The central bank's decision to remove charges on NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement System) transactions also pulled the markets lower.
RBI removes charges on NEFT, RTGS transactions
The Reserve Bank of India (RBI) on Thursday decided not to levy charges on RTGS and NEFT transactions. In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems," the RBI notification read.
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