The 30-share BSE Sensex extended fall, losing 300 points due to consistent broad-based selling. European markets too shed somewhat gains after Spanish bond yields rose to a record high.
The BSE benchmark plunged 302 points or 1.78% to 16,647.89, weighed down by 28 stocks. Meanwhile, the NSE benchmark was down 95.95 points or 1.87% to 5,043.10.
The Indian rupee fell 39 paise to 55.78 as against the US dollar. Euro declined 0.56% to 1.26 as against the US dollar.
The Bank Nifty crashed over 3.5% as the Reserve Bank of India kept policy rates and CRR unchanged at its mid-quarter monetary policy review due to higher retail inflation.
Country's largest lenders State Bank of India and ICICI Bank plummeted over 4% while rival HDFC Bank was down 3%. Housing finance company fell over 1%.
Cigarette major ITC, index heavyweight Reliance Industries and top commercial vehicle major Tata Motors were down 1.8% each.
Engineering and construction major by sales Larsen & Toubro and state-owned capital goods company BHEL dropped 2% each.
Technology majors TCS, Infosys and Wipro were down 1% each. Top telecom operator Bharti Airtel was down over 1%.
Shares of Sterlite Industries tumbled over 4.5% and state-owned gas transportation services provider GAIL slipped nearly 3%.
However, Tata Steel and Bajaj Auto shed somewhat gains, rising just 0.5% each.
About 2.7 shares declined for every share advancing on the National Stock Exchange.
Among European markets, France's CAC and Germany's DAX were marginally down whereas Britain's FTSE was down 0.2%. Spain's 10-year bond yield rose to a record high of 7.05% and Italy's 10-year govt bond yield was up by 14 basis points at 6.06%.
At 13:47 hours IST: Sensex down 250 pts; Tata Steel, Bajaj Auto, CIL outperform
The BSE Niftycontinued to trade below the 5100 level, falling over 1% since the announcement of mid-quarter policy review by the RBI on Monday. However, global markets outperformed Indian equities due to favourable outcome from Greek's elections.
The BSE benchmark fell 253.54 points or 1.50% to 16,696 and the NSE benchmark was down 79 points to 5,060, but the broader markets were marginally down.
The Bankex tanked over 3.3% as the central bank said they have kept the cash reserve ratio of scheduled banks unchanged at 4.75% and the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8%. Earlier the market had expected the 25 basis points cut in repo rate or CRR in today's policy, but that did not happen due to higher inflation.
"The evolving growth-inflation dynamic will continue to influence the Reserve Bank's stance on interest rates. Both headline and retail inflation rates are rising, which have a bearing on inflation expectations. Future actions will depend on a continuing assessment of external and domestic developments that contribute to lowering inflation risks," RBI said underscoring the need to resolve the supply bottlenecks to arrest the widening current account deficit.
Government said CPI inflation stood at 10.36% YoY for May while the WPI inflation increased to 7.55% in May versus 7.23% MoM.
Country's largest lender State Bank of India tumbled 4% while its rival ICICI Bank and HDFC Bank were down 3-3.5%. Housing finance company HDFC fell 1.2%.
Even yield on 8.15% 10-year bond climbed 0.93% to 8.1273 while the Indian rupee depreciated by 39 paise to 55.78 as against the US dollar.
The BSE Realty Index too was down 2.5% as DLF crashed 4.4%. HDIL, Indiabulls Real and Unitech slipped 3-3.8%.
Index heavyweight Reliance Industries and state-owned oil & gas producer ONGC were down 1.65% and 0.55%, respectively.
Shares of ITC, Infosys, Larsen & Toubro, TCS, HUL and Bharti Airtel slipped0.7-1.5%. GAIL, Sterlite Industries and Dr Reddy's Labs tumbled 2-3%.
However, Tata Steel rose 1.4% as it made open offer in group companies Tinplate and Tata Sponge Iron. Coal India and Bajaj Auto gained 0.22% and 0.7%, respectively.
About two shares declined for every share rising on the National Stock Exchange.
On the global front, European markets shed somewhat early gains after Spain's 10-year bond yield rose to record high of 7.05% and Italy's 10-year government bond yield went up by 14 basis points at 6.06%. Favourable outcome in Greek's elections could not support the market for long. Even the Dow Jones futures, which rose over 60 points at one point of time, fell 20 points.
At 12:22 hours IST: Sensex, Nifty fall 1%; Banks crash after RBI move
The Sensex fell 1% on Monday, led by a sell-off in lenders, after the Reserve Bank of India surprised markets by keeping both the repo rate and the cash reserve ratio unchanged.
Local shares had rallied in June, hitting a six-week high early on Monday's session, on expectations the RBI would ease policy after recent data showed economic growth in January-March fell to a nine-year low.
Instead, the RBI said it remains concerned about inflation, though the central bank did state it would monitor liquidity conditions, such as by purchasing bonds via open market operations as warranted.
The RBI is still expected to cut interest rates further after last easing the repo rate by 50 basis points to its current 8 percent in April, but the timing is now up in the air.
The focus now also shifts to the government, whose perceived lack of policy reform was a key factor behind the slump in local markets that sent the rupee currency tumbling to a record low in May.
"Rates are headed lower, but cuts are going to be more unpredictable," said Sandeep J. Shah, CEO of investmentadvisory firm S a mpriti Capital.
"Expectations from the government are at zero, and any significant action would therefore result in short-covering"
The Sensex fell 1%, after erasing earlier gains of as much as 0.9% that had brought the index to its highest since May 4. The Nifty fell 1.1%.
Domestic stocks had rallied 4.5% this month as of Friday's close, after weak GDP data on May 31 had sparked expectations the RBI would cut rates.
Besides keeping interest rates unchanged, the RBI also disappointed investors by leaving the cash reserve ratio at 4.75% after last cutting the amount of money that lenders must keep with the central bank in March.
The surprise outcome sent the NSE banking index tumbling down 2.5% after the sub-index had gained 6.6% this month as of Friday's close.
State Bank of India dropped 3.3%, while ICICI Bank and HDFC Bank fell over 2% each.
Other rate-sensitive stocks also slumped, with property firm DLF down 4% and Unitech down 3.7%.
At 10:59 hours IST: RBI lets mkt down, Nifty at day's low, bond yields up 1.11%
The BSE Sensex and NSE Nifty erased all early gains as the Reserve Bank of India (RBI) disappointed the street by keeping repo rate and cash reserve ratio unchanged in its mid-quarter policy review on Monday.
Traders wound up long positions that had been created in last two weeks on hopes that the central bank may cut repo rate or cash reserve ratio by 25 basis points at least.
The BSE benchmark fell 143.55 points or 0.85% to 16806.28 and the NSE benchmark lost 48.85 points to 5,090.
Even the Indian rupee depreciated by 18 paise to 55.57 as against the US dollar. 8.15% 10-year bond yields spiked 1.11% to 8.14.
In its statement, the RBI says, global macro and financial conditions have been deteriorated since April. Even domestic macro situation raises deepening concerns.
Retail inflation is on uptrend, so cut in policy rates now could exacerbateinflation, the RBI says. Inflation for May increased to 7.55% from 7.23% in April.
Central bank has hiked Export Credit Refinance Facility to 50% that will be effective from fortnight beginning June 30.
The BSE Bankex fell over 2% as country's largest lenders State Bank of India, ICICI Bank and HDFC Bank were down 2-3%. Housing finance company HDFC too lost 1%.
FMCG majors ITC and HUL declined 1% each.
Index heavyweight Reliance Industries and L&T slipped over 0.6%.
About two shares declined for every share rising on the National Stock Exchange.
At 10:22 hours IST: Sensex holds 17000 ahead of RBI policy; SBI rises 2%
The BSE Sensex continued to trade above the 17,000 level ahead of credit policy, supported by banks, capital goods, auto, oil & gas and metals stocks. Asian markets remained strong after favourable outcome from Greece's elections.
The BSE benchmark rose 130.28 points to 17080.11 that hit the 17,000 level for the first time since May 4, 2012. Meanwhile, the NSE benchmark gained 41 points or 0.8% at 5,180.05, though there was somewhat profit booking.
Country's largest lender State Bank of India shot up 2% on hopes that the RBI may surprise the street at its mid-quarter monetary policy review. Market experts feel the RBI may cut repo rate or CRR by 25 bps, but the market may rally if the RBI cuts rates by 50 bps. Private sector lender ICICI Bank was up 1.5% while HDFC Bank and HDFC were up 0.5%.
Top commercial vehicle maker Tata Motors jumped nearly 3% after Finance Minister rejected Petroleum Minister's proposal of tax hike on Diesel cars. Maruti, M&M, Hero Motocorp and Bajaj Auto gained 1-1.6%.
Engineering and construction major by sales Larsen & Toubro and state-owned capital goods company BHEL were up 1.6% each.
Reliance Industries, India's most valued stock rose 0.7%. Technology majors Infosys and TCS moved up 0.5% each.
Tata Steel gained more than 2.6%; itmade open offer to shareholders of Tinplate (up 16%) and Tata Sponge Iron (up 11%) for buying 1.46 crore shares and 17.34 lakh shares, respectively.
However, FMCG majors ITC and HUL were marginally down.
Asian markets like Hang Seng, Nikkei, Straits Times, Kospi and Taiwan Weighted gained 1-2% while Shanghai was up 0.7% as Greece exit from Eurozone averted for the time being after New Democracy Party emerged as the largest party with around 30% vote share followed by Syriza party with 27% vote share.
At 9:20 hours IST: Sensex gains 150 pts on rate-cut hopes, global cues aid
The BSE Sensex and NSE Nifty started off trade with 1% gain on Monday following strong Asian cues after favourable outcome from Greek election. RBI's mid-quarter policy review will also be closely watched by the market today.
The BSE benchmark was up 150.72 points at 17,100.55 and the NSE benchmark climbed 50 points to 5,189. The broader markets were up over 0.5%.
Among Asian markets, Hang Seng, Nikkei, Straits Times, Kospi and Taiwan Weighted rose 1-2% while Shanghai was up 0.75%. The Dow Jones futures climbed 67 points, pointing towards a positive open today.
Greek polls provided hopes that Greece will stay in eurozone after New Democracy emerged as the largest party with around 30% vote share followed by Syriza party with 27% vote share. Socialist PASOK won over around 13% in Greek election.
Back home, the Reserve Bank of India will announce its mid-quarter policy review today. Experts feel the RBI may cut repo rate by 25 basis points or cash reserve ratio by 25 bps.
Nandan Chakraborty of Enam expects the RBI to cut repo rate by 25 basis points as the slip in domestic growth deterioration warrants front-ended action.
IDFC, ICICI Bank, PNB, Axis Bank, Sesa Goa, Sterlite, Tata Steel, L&T, JP Associates, BHEL, Maruti and Hero Motocorp gained 1-2%.
ITC, HUL and BPCL were flat.
The CNX Midcap rose 65 points to 7,097.About four shares advanced for every share declining on the National Stock Exchange.
In the second line shares, GMR Infrastructure, Lanco Infratech and IVRCL were up 1.5-2.5%.
IDBI Bank, Yes Bank, DCB and UCO Bank moved up 1.5-2%.
Real estate stocks like Unitech, HDIL and Indiabulls Real Estate too gained 1.5-2%.
Aviation companies like Kingfisher Airlines, Jet Airways and SpiceJet rallied 1-2% after a 5% cut in aviation turbine fuel price in Delhi.
Pantaloon Retail surged 3%.
Tinplate shot up 16% to Rs 16.55 and Tata Sponge Iron surged 11.5% to Rs 340.55 after open offer made by Tata Steel. Open offer for Tata Sponge is for up to 17.34 lakh shares (11.26%) at Rs 375/share and open offer for Tinplate is for 1.46 crore shares (14%) at Rs 60/share.
However, SKS Microfinance fell over 1% after The Hindu Business Line reported that company has been barred from operating in Andhra Pradesh's Mahabubnagar district for not following rules.