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Sensex drops 434 points after RBI cuts repo rate and GDP forecast

Mumbai (Maharashtra) [India], Oct 4 (ANI): The interest rate cut by Reserve Bank of India (RBI) failed to boost market sentiment on Friday as equity benchmarks fell after the central bank also lowered its forecast of GDP growth rate to 6.1 per cent for the current financial year.

The BSE S&P Sensex closed 434 points or 1.14 per cent lower at 37,673, while the Nifty 50 was down by 139 points or 1.23 per cent to 11,175.

The RBI cut repo rate by 25 basis points to 5.15 per cent, bringing the cumulative reduction in interest rate of 135 basis points for this calendar year. However, it also lowered the GDP growth forecast to 6.1 per cent for FY20 from 6.9 per cent earlier.

With the latest central bank move, investors appeared unsure if it is sufficient to support the flagging consumer demand amid slowing economic output, rising unemployment rate and low business confidence.

Except for IT, all sectoral indices at the National Stock Exchange were in the red. Nifty bank fell by 2.4 per cent, financial service by 1.9 per cent, FMCG by 1.5 per cent and metal by 1.2 per cent.

Among stocks, Grasim tumbled by 4.2 per cent, UltraTech Cements by 4 per cent, JSW Steel by 3.8 per cent and Titan by 3.4 per cent. The other prominent losers included private lenders like Kotak Mahindra Bank, ICICI Bank and HDFC Bank besides Bharat Petroleum Corporation and Tata Motors.

But IT majors like Wipro, Tata Consultancy Services, Infosys, Tech Mahindra and HCL Technologies showed marginal gains. The other gainers were ONGC, GAIL, NTPC, IndusInd Bank and Hero MotoCorp.

Meanwhile, Asian stocks were mixed before a key US job report. MSCI's broadest index of Asia Pacific shares outside Japan rose marginally while Japan's Nikkei stock index was up by 0.32 per cent.

Hong Kong shares were down by 1.11 per cent with fragile sentiment as the territory's government mulls emergency laws to contain months of often violent protest against China's rule of the former British colony.

South Korean Kospi and Shanghai composite too were in the red.

(ANI)