Key benchmark indices extended losses for the second consecutive day on Thursday after Reserve Bank of India (RBI) cut the repo rate by 25 basis points to 6%.
A basis point is a hundredth of a percentage point.
BSE Sensex on Thursday closed 192.40 points, or 0.49% lower at 38684.72 after it touched an intra-day low of 38581.04, while NSE Nifty 50 ended at 11598, down 0.39% or 45.95 points than the previous close after touching an intra-day low of 11559.20.
The RBI decision dashed hopes of many investors who were expecting a steeper repo rate cut of 50 basis points. The equity markets turned highly volatile after the Monetary Policy Committee of RBI announced its decision.
Of the 12 Nifty sectoral gauges, eight witnessed profit booking. The remaining pack ended in green, led by Nifty Media (1.09%), followed by Nifty Pharma (0.91%) and Nifty Auto (0.66%).
The sectors which witnessed profit booking are Nifty IT (1.37%), Nifty Energy, Nifty Private Bank (0.82%), Nifty Bank (0.63%), Nifty Metal and PSU Bank (0.42%).
In the 30-stock BSE Sensex, 17 scrips ended in red, with major losers being TCS, YES Bank, IndusInd Bank, HCL Tech, Reliance and Kotak Mahindra Bank, losing between 1.08% and 3.17%.
Major gainers were Tata Motors, HeroMoto Corp, Bharti Airtel, Asian Paints, HDFC and Vedanta, gaining between 0.7% and 2.49%.
Nagaraj Shetti, senior technical and derivative analyst, HDFC Securities, said the Nifty continued with follow-through decline on Thursday and closed lower after showing weakness in the last session.
“A small negative candle was formed today, which has placed at the support of 11560. Technically, this pattern could indicate a negative trend, but the lack of strength in the downside momentum could give chance for bulls to make a comeback from the lows. Hence, a decisive move below 11550-levels could signal more weakness for near term,” he said.
In a report, Motilal Oswal Financial Services said Nifty declined nearly half percent (46 points) to close at 11598. It remained highly volatile throughout the session due to RBI policy meeting and traded in the broader range of 100 points in between 11560 and 11660. Nifty formed a bearish candle and lower lows on the daily scale but managed to hold above its crucial support of 11550 zones.
Profit booking came after RBI announced credit policy and cut repo rate by 25 bps while the cash reserve ratio was kept unchanged at 4%.
Traders were booking profit after the US dollar spiked 60 paise against the Indian rupee and 10-year G-sec yield rose by 5 basis points. Global markets were in a cautious mode as Asian and European markets were a mixed bag. Market hope is of trade negotiation between the US and China, the report said.
CASHING IN
- Profit booking came after RBI announced credit policy and cut repo rate by 25 bps while the cash reserve ratio was kept unchanged at 4%
- Global markets were in a cautious mode as Asian and European markets were mixed bag
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The RBI decision dashed hopes of many investors who were expecting a steeper repo rate cut of 50 basis points. The equity markets turned highly volatile after the Monetary Policy Committee of RBI announced its decision. 
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