Reserve Bank’s holding policy rates steady on Tuesday failed to soothe jittery investor nerves, which were hit by a fresh slide in crude oil prices, as the market benchmark Sensex plummeted by 286 points to close at 24,539.
Putting the ball in Government’s court, RBI Governor Raghuram Rajan kept the key interest rate unchanged saying that further easing will depend on “structural reforms” in the forthcoming Budget as well as macroeconomic factors.
The apex bank, which had cut interest rate by 125 basis points in 2015, retained the repo rate at 6.75 per cent.
Besides, rupee weakening by 14 paise to 67.98 against the dollar also weighed on the domestic equities.
“The market was largely digesting the announcement, which was in-line with expectations. But a slip in Europe due to fall in crude prices has impacted Indian equities,” said Vinod Nair, Head-Fundamental Research of Geojit BNP Paribas.
Globally investors are shunning risky assets like oil, equities and commodities, he added.
Back home, the BSE Sensex opened higher at 24,868.21 and moved up to 24,928.75 on initial buying. But on profit-booking it declined afterwards to 24,460.53 before finishing at 24,539, showing a loss of 285.83 points or 1.15 per cent.
The NSE Nifty also broke below the 7,500-mark by falling 100.40 points or 1.33 per cent to 7,455.55. Intra-day, it shuttled between 7,576.30 and 7,428.05.
Sector-wise, the BSE metal index suffered the most by plunging 4.33 per cent followed by oil&gas (2.59 pc), infra (2.50 pc), healthcare (2.46 pc), PSU (2.45 pc), power (2.42 pc), realty (1.71 pc), banking (1.68 pc) and auto (1.39 pc).
Bucking the trend, shares of Bajaj Auto gained 1.48 per cent to Rs2,362.55 after the company reported 1.78 per cent growth in total sales in January.
In overseas markets, Asian equities ended lower on fresh weakness in oil prices. But, Chinese stocks ended up by 2.26 per cent after the country’s central bank injected more liquidity into the financial system. Other indexes like Hong Kong, Japan, Singapore, South Korea and Taiwan declined by 0.32 per cent to 0.89 per cent.