Sensex ends 434 points lower after RBI cuts growth forecast, slashes repo rate

Reversing early morning trends, equity benchmark indices on Friday ended in red after the Reserve Bank of India lowered its GDP growth forecast for the current financial year to 6.1% from 6.9% earlier and also announced cut in repo rate by 25 basis points.

The Sensex closed at 37,673.31 points, down by 433.56 points or 1.14%, while Nifty ended at 11,174.75 after losing 139.25 points. (1.23%).

This was seen as a reaction to the central bank's revision of GDP growth forecast and its decision to slash the repo rate to 5.15%.

While the central bank brought the cumulative reduction in interest rate of 135 basis points for this calendar year, investors appeared unsure if it is sufficient to support the flagging consumer demand amid slowing economic output, rising unemployment rate and low business confidence.

Besides, the aggravating non-banking financial company (NBFC) liquidity crisis continues to severely impact the credit availability for industry, especially real estate developers and construction firms.

Except for IT, all sectoral indices at the National Stock Exchange were in the red. Nifty bank fell by 2.4 per cent, financial service by 1.9 per cent, FMCG by 1.5 per cent and metal by 1.2 per cent.

Among stocks, Grasim tumbled by 4.2 per cent, UltraTech Cements by 4 per cent, JSW Steel by 3.8 per cent and Titan by 3.4 per cent. 

The other prominent losers included private lenders like Kotak Mahindra Bank, ICICI Bank and HDFC Bank besides Bharat Petroleum Corporation and Tata Motors.

But IT majors like Wipro, Tata Consultancy Services, Infosys, Tech Mahindra and HCL Technologies showed marginal gains. The other gainers were ONGC, GAIL, NTPC, IndusInd Bank and Hero MotoCorp.

(With ANI inputs)