RBI policy: Most of interest rate-sensitive realty, auto stocks decline

New Delhi: A large number of interest rate-sensitive realty, auto and bank stocks declined on Thursday on a day when the Reserve Bank of India kept the benchmark interest rate and stance unchanged for the ninth straight policy meeting, saying it cannot afford to look through persisting high food inflation.

Shares of Godrej Properties dropped 3.29 per cent, Macrotech Developers declined 2.38 per cent, Mahindra Lifespace Developers (2.17 per cent), Sobha Limited (1.75 per cent), DLF (1.49 per cent), Oberoi Realty (1.47 per cent) and Brigade Enterprises (1.12 per cent) on the BSE.

The BSE realty index went lower by 1.22 per cent to settle at 7,862.76.

From the auto pack, TVS Motor Company declined 1.86 per cent, Apollo Tyres (1.68 per cent), Bosch (1.64 per cent), Hero MotoCorp (1.46 per cent), Maruti (1.27 per cent), Bajaj Auto (0.58 per cent) and Ashok Leyland (0.40 per cent).

The BSE auto index dropped 0.34 per cent to 56,388.11.

"RBI MPC is in wait-and-watch mode and has kept the interest rates unchanged, waiting for clues from the largest Central Bank of the world, the US Federal Reserve, before acting. Stock markets will continue to consolidate in the meanwhile," said Umeshkumar Mehta, CIO, SAMCO Mutual Fund.

Bank stocks ended on a mixed note, with Bank of Baroda slipping 0.94 per cent, Canara Bank (0.88 per cent), ICICI Bank (0.70 per cent), Yes Bank (0.54 per cent), Kotak Mahindra Bank (0.42 per cent) and State Bank of India (0.18 per cent).

The BSE bank index ended flat at 57,033.81.

The 30-share BSE Sensex declined by 581.79 points or 0.73 per cent to settle at 78,886.22 in a volatile trade. After a day's breather, the NSE Nifty retreated to settle lower by 180.50 points or 0.74 per cent to 24,117.

The Reserve Bank of India on Thursday expectedly kept the benchmark interest rate and stance unchanged for the ninth straight policy meeting, saying it cannot afford to look through persisting high food inflation and has to remain vigilant to prevent spillover.

Retaining its unambiguous focus on inflation, the Monetary Policy Committee (MPC), which consists of three RBI and three external members, kept the benchmark repurchase or repo rate unchanged at 6.50 per cent.

Four out of the six members of MPC voted in favour of the rate decision. The panel, whose four-year term ends in October, also decided to retain a policy stance at "withdrawal of accommodation" to aid MPC's focus on bringing inflation towards its 4 per cent target.

Inflation climbed to 5.08 per cent in June, primarily driven by the food component.

RBI Governor Shaktikanta Das said food inflation remains "stubbornly" high.

"The Reserve Bank of India kept interest rates unchanged as widely expected and reiterated that it will continue to withdraw accommodative policy to ensure a decline in inflation," Deepak Jasani, Head of Retail Research at HDFC Securities, said.