The market has come off its earlier high and is currently quite volatile, with investors turning a bit listless following the Reserve Bank of India cutting repo rate by 25 basis points to 7.5%. The Reverse Repo rate has now come down to 6.5%.
The central bank, which has left CRR unchanged, says inflation remains a major concern and that room for further monetary easing is quite limited.
Though the 25 basis points cut in repo rate is on expected lines, the market has tumbled into the red, with news that the ruling coalition DMK has come out of the government, raising concerns on the political front.
The Sensex has plunged 290.36 points or 1.46% to 19,002.84. The Nifty, meanwhile, is down with a loss of 80.15 points or 1.37% at 5755.20.
PSU, oil, bank, metal and capital goods stocks are among the notable losers. Information technology, power and consumer durables stocks are also trading weak now. Realty and automobile stocks have given up their gains. Select pharma and FMCG stocks are finding modest support.
ONGC, Coal India, Hero Motocorp, BHEL, BPCL, Punjab National Bank, HDFC Bank, State Bank of India, HDFC and Jaiprakash Associates are down 2% - 3.5%.
Bharti Airtel, Jaiprakash Associates, Jindal Steel & Power, Bank of Baroda, Sesa Goa, Ultratech Cement, IDFC, Cairn India, Hindalco, ACC, Mahindra & Mahindra, Reliance Industries, Reliance Infrastructure, Kotak Bank, Cipla and ICICI Bank are also down with sharp losses.
GAIL India, Sun Pharmaceutical Industries, Lupin, Ranbaxy Laboratories and Bajaj Auto are holding on in positive territory with smart gains.