Equity benchmarks witnessing caution ahead of the Reserve Bank of India's (RBI) policy review, swiftly turned red after the rates were left unchanged. Bank Nifty fell 1.5% and bond yields hardened by 0.33% following RBI's `no-action' mode.
A CNBC-TV18 poll showed majority of the participants were betting in favour of a CRR cut after November inflation showed a decline. Major banking stocks like HDFC Bank, SBI, ICICI Bank and Axis Bank were trading with 1%, 2.20%, 1.70% and 2.33% cuts. Experts said bond yields may go down to sub 8% yields by Budget, if all other parametres remain constant.
At 11.03 am the Sensex was down 58.75 points or 0.31% at 19185.67, and the Nifty was down 22.30 points or 0.38% at 5835.60.
Meanwhile, Tata Motors gained 1.9 percent, up for a fourth day, after stronger-than-expected November sales at Jaguar Land Rover (JLR) reduced concerns about the outlook for the key unit of the Indian auto maker.
Sun Pharmaceutical Industries gained 2 percent after it said on Monday Caraco Pharmaceutical Laboratories (Caraco), its wholly-owned subsidiary, has acquired URL generic business from Takeda Pharmaceutical Company.
Key equity indices were up slightly ahead of the Reserve Bank of India monetary policy review. It is widely expected that the central bank will keep policy rates unchanged and cut cash reserve ratio by 25 basis points to ease liquidity in the system.
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