Mumbai, Dec 6 (PTI) Equities suffered for the second

straight session today after the Reserve Bank kept interest

rates on hold but raised the inflation forecast, dashing

medium term rate cut hopes and sparking a sell-off in banking

stocks.

Benchmark Sensex slumped 205 points to end at 32,597.18,

while the broader Nifty finished at 10,044.10, down 74.15

points.

The six-member Monetary Policy Committee (MPC), headed by

Reserve Bank Governor Urjit Patel, kept the policy rate

unchanged at 6 per cent on expected lines but raised the

inflation forecast for the remainder of the fiscal to 4.3-4.7

per cent.

The central bank kept the economic growth forecast

unchanged at 6.7 per cent for the fiscal ending March 31.

The 30-share index declined by 205.26 points, or 0.63 per

cent, to 32,597.18 after hitting a low of 32,565.16 soon after

the central bank announced its policy decision.

The wider Nifty hit a low of 10,033.35 before finishing

at 10,044.10, down 74.15 points or 0.73 per cent. It had

touched a high of 10,104.20 in early trade.

Interest rate-sensitive stocks took a beating, dragging

the BSE banking index down by 1.23 per cent. SBI, ICICI Bank,

Axis Bank, HDFC Bank, Bank of Baroda, Punjab National Bank and

Yes Bank fell by up to 2.27 per cent.

“Given that interest rates are unlikely to reduce at

least in the near to medium term, rate sensitive stocks slid

due to rising oil price and concern over fiscal slippage,”

said Vinod Nair, Head of Research, Geojit Financial Services.

In sync with overall trend, the rupee too weakened to

quote at 64.55 against the dollar intra-day.

Sun Pharma emerged as the worst performer among Sensex

constituents by falling 2.31 per cent, while Bajaj Auto

declined 1.65 per cent.

Other losers, apart from bank stocks, were ONGC, L&T,

Tata Motors, M&M, Tata Steel, Bharti Airtel, ITC Ltd, NTPC, Dr

Reddy’s, Hero MotoCorp, Asian Paint, Adani Ports, Cipla,

Wipro, TCS and Lupin.

Sector-wise, the BSE metal index fell the most by

2.03 per cent, followed by telecom 1.38 per cent, PSU 1.32 per

cent, banks 1.23 per cent, infrastructure 1.15 per cent,

capital goods 1.09 per cent, healthcare 1.02 per cent, power

0.91 per cent and auto 0.73 per cent.

The mid-cap index shed 0.89 per cent and small-cap

declined 0.66 per cent.

Meanwhile, foreign portfolio investors (FPIs) sold shares

worth a net Rs 1,470.56 crore, while domestic institutional

investors (DIIs) bought to the tune of Rs 1,074.39 crore

yesterday, as per provisional data released by the stock

exchanges.

Other Asian markets closed lower. Japan’s Nikkei fell

1.97 per cent, Hong Kong’s Hang Seng shed 1.63 per cent while

China’s Shanghai Index was down 0.29 per cent, extending a

retreat across Europe and New York.

Frankfurt’s DAX 30 fell 0.08 per cent while Paris CAC 40

shed 0.26 per cent in their early deals. London’s FTSE too

fell 0.16 per cent.

This is published unedited from the PTI feed.