Mumbai: Shares turned negative on on Tuesday afternoon as investors expected another rate hike in the near term to tame inflation, after the central bank raised key rates by a quarter point in line with market forecast.
Financials led the decline.
At 1:41pm, the 30-share BSE index was down 0.18% at 19,116.22 points, with 14 components declining. It had risen nearly 1% earlier in the day. The 50-share NSE index was down 0.1% at 5,736.95.
Shares continued to rally for second consecutive day earlier in the day as markets got a positive trigger when Reserve Bank of India (RBI) hiked its key short term repo and reverse repo rates by 25 basis points each in line with the market expectations.
The new repo and reverse repo rates stand at 6.5% and 5.5% respectively. The central bank however left the cash reserve ratio unchanged despite contention by bankers that such a move would help ease liquidity in the banking system.
The benchmark BSE Sensex surged 172.63 points or 0.90% at 19,323.91 and the Nifty advanced 52.85 points or 0.92% to 5796.10.
Meanwhile other regional peers are trading mixed while US Dow future too was up by 11 points on the screen trade.
In the sectoral space there were no losers and capital goods, oil and gas, reality, consumer durables and public sector undertakings shares were leading.
However ICICI Bank was witnessing some profit booking and was marginally in red. Wipro has bounced back after two days of fall while SKS Micro Finance was down on disappointing Q3 results. However, the broader indices were also trading in green.
The top gainers on the Sensex were NTPC up 2.42%, Sterlite Industries up 2.35%, L&T up 2.11%, HDFC up 1.77% and DLF up 1.72% .Whereas, ICICI Bank down 0.08% was the only loser on the index.
Meanwhile majority of the other regional markets were trading in the green; Hang Seng increased 0.48% and Nikkei 225 added 1.15%.