By Bharath Rajeswaran and Vivek Kumar M
(Reuters) -Indian shares fell on Wednesday, led by rate-sensitive stocks, after the central bank held its key rates and maintained a ‘neutral’ policy stance, disappointing some investors who were expecting a dovish tilt amid rising global trade uncertainty.
The Nifty 50 was down 0.4% at 24,551.1 points and the BSE Sensex lost 0.3% to 80,466.22, as of 11:10 a.m. IST.
Both benchmarks traded flat ahead of the Reserve Bank of India’s policy decision, but fell about 0.3% each soon after the rate pause.
While maintaining that the domestic economic outlook remained “bright” despite global trade headwinds, the RBI held rates steady, as expected, and kept its policy stance at “neutral”, following a surprise 50-basis point cut in June.
“Given that the Indian rupee is weakening and global interest rate differentials are narrowing, the scope for a rate reduction was slim,” said Umesh Kumar Mehta, chief investment officer at SAMCO Mutual Fund.
Despite rising expectations of a softer stance, the RBI played it safe and that was likely its best option, three analysts said.
All 16 major sectors logged losses. The broader small-caps and mid-caps fell around 1.4% and 1.2%, respectively, with analysts attributing their underperformance to greater exposure to the domestic economy and higher sensitivity to borrowing costs.
Rate-sensitive sectors such as realty lost 2.4%, while consumer and auto indexes fell 0.9% each. Financials reversed early gains to trade 0.3% lower.
Among individual stocks, biscuit maker Britannia lost 2% after missing profit estimates in the June quarter.
Telecom services provider Bharti Airtel gained 1% after posting a jump in first-quarter profit, aided by new user additions and the lingering benefits of last year’s price hikes.
Bharti Airtel’s unit Bharti Hexacom lost 2.5% after logging a lower June-quarter profit.
(Reporting by Bharath Rajeswaran and Vivek Kumar M in Bengaluru; Editing by Janane Venkatraman, Nivedita Bhattacharjee and Sonia Cheema)
