Mumbai: Market benchmark Sensex on Tuesday fell over 97 points, halting its three-day rally, and NSE Nifty slipped below the 8,700-mark as investors booked profits after the RBI maintained status quo in its monetary policy review.
Reserve Bank Governor Raghuram Rajan today left interest rates unchanged in his last monetary policy on inflationary pressures but said the central bank's stance remains "accommodative".
The rupee weakening by 14 paise to 66.98 (intra-day) against the dollar during the day also weighed on the trading sentiment.
The 30-share index declined by 97.41 points, or 0.35 percent, to 28,085.16 after shuttling between 28,289.96 and 27,956.77.
The gauge had gained over 485 points in the previous three sessions on positive global cues and the passage of long-pending Goods and Services Tax (GST) Constitutional Amendment bill by Parliament.
The wider National Stock Exchange index Nifty broke below the 8,700-mark and hit a low of 8,638.20 before settling 33.10 points or 0.38 percent to 8,678.25. Intra-day, it touched a high of 8.728.35.
"It was a volatile day on the bourses as key benchmark indices reacted to RBI Governor Raghuram Rajan's last credit policy. Markets, however, traded in the negative zone and closed the day with losses of more than 0.3 percent," Shreyash Devalkar, Fund Manager - Equities, BNP Paribas Mutual Fund said.
Sectoral performance was mixed with media and PSU banking stocks attracting buyer interest and healthcare, FMCG and metal stocks bearing the brunt of the bears, he added.
The RBI left the short-term lending rate, or repo rate unchanged at 6.50 percent, and the cash reserve ratio static at 4 percent. The central bank also retained the GDP projection at 7.6 percent.
Out of the 30-share Sensex pack, 21 ended lower, while nine led by Coal India, ONGC, SBI, Hindustan Unilever, Axis Bank, Infosys and Dr Reddy's finished higher and cushioned the fall.
Lupin Ltd suffered the most among Sensex constituents by falling 5.03 percent to Rs 1,607.60 despite the company today reporting an increase of 55.12 percent in its conslidated net profit to Rs 881.95 crore.
Other big losers from the index included HDFC Ltd, Power Grid, Hero MotoCorp, M&M, Tata Steel, Bharti Airtel, Bajaj Auto, L&T, GAIL, Sun Pharma, Maruti Suzuki, Cipla, Adani Ports and Asian Paint, falling by up to 1.81 percent.
Sector-wise, the BSE oil&gas index fell the most by 0.88 percent, followed by healthcare 0.71 percent, metal 0.69 percent, FMCG 0.58 percent, auto 0.57 percent, capital goods 0.36 percent, realty 0.25 percent and power 0.20 percent.
In line with the trend, the small-cap index shed 0.45 percent and mid-cap 0.35 percent.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 1,156.19 crore yesterday, as per provisional data released by the stock exchanges.
Towards the global market, other Asian markets closed higher as fresh Chinese data provided signs of improving conditions for the world's second largest economy.
China's Shanghai Index rose 0.71 percent and Japan's Nikkei advanced 0.69 percent, but Hong Kong's Hang Seng closed 0.13 percent down. European markets were stable at the open after a dip on Wall Street in yesterday's trade.
Frankfurt's DAX 30 gained nearly 0.56 percent, while France Paris CAC 40 rose 0.45 percent. London's FTSE rose 0.34 percent.