Banks, realty stocks crack up to 3% as RBI keeps policy rates unchanged

NEW DELHI: Shares in rate sensitive sectors such as banks, and realty closed in red on Tuesday, after the Reserve Bank of India (RBI) in its first bi-monthly Monetary Policy Statement, 2015-16, kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.5 per cent.

The central bank also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL).

"Transmission of policy rates to lending rates has not taken place so far despite weak credit off-take and the front loading of two rate cuts," Raghuram Rajan said in his statement.

With little transmission and the possibility that incoming data will provide more clarity on the balance of risks on inflation, the Reserve Bank will maintain status quo in its monetary policy stance in this review, added the note.

Going forward, the RBI clarified that the accommodative stance of monetary policy will be maintained, but monetary policy actions will be conditioned by incoming data.

The BSE Banking index closed 0.71 per cent lower, led by losses in Axis Bank (down 1.7 per cent), followed by ICICI Bank (down 1.2 per cent), State Bank of India (down 0.97 per cent), and IndusInd Bank (down 0.96 per cent).

The BSE Realty index closed 1.6 per cent lower, led by losses in Omaxe (down 3.2 per cent), DLF (down 3 per cent), Indiabulls Real Estate (down 2.7 per cent), Unitech (down 2.5 per cent) and Prestige Real Estate (down 2.3 per cent).

The BSE Auto index recouped losses and closed 0.08 per cent higher, supported by gains in Bajaj Auto (up 3.38 per cent), Exide Industries (up 3.1 per cent), M&M (up 1.9 per cent) and MRF (up 1.8 per cent).