A much-awaited cut in key policy rate by RBI failed to lift the market as the benchmark S&P CNX Nifty of the National Stock Exchange today dropped by 25 points on tail-end profit-booking ahead of the expiry of January series derivative contracts.
In the third quarter monetary policy meeting today, the apex bank reduced short-term lending rate, or repo, and also cash reserve ratio (CRR) by 25 basis points each to support economic growth, but expressed concern over the widening current account deficit (CAD).
The RBI also cut its GDP forecast to 5.5 per cent for the current fiscal year from 5.8 per cent projected earlier.
Lack of major triggers from global markets too weighed on the sentiment. Asian stocks closed mixed while European shares showed steady to weak trend in afternoon deals.
The 50-issue Nifty touched a fresh two-year intra-day high of 6,111.80 after news of rate cut filtered in.
However, heavy profit-booking ahead of the expiry of derivative contracts on January 31 later pulled the index down and it settled at 6,049.90, a net loss of 24.90 points, or 0.41 per cent, over the previous close.
Foreign Institutional Investors (FIIs) bought shares worth Rs 810.20 crore yesterday, as per Sebi data.
Top five losers from the Nifty pack were Bank of Baroda 2.68 pct, HDFC Bank 2.67 pct, Bajaj Auto 2.63 pct, Hindalco 2.49 pct and Bharti Airtel 2.20 pct. Notable gainers were Axis Bank 4.42 pct, Jaiprakash Associates 1.77 pct, Coal India 1.58 pct, ITC 1.46 pct and Kotak Bank 1 pct.
Turnover in the cash segment shot up to Rs 14,975.34 crore from Rs 11,025.61 crore yesterday. A total of 8,092.95 lakh shares changed hands in 66,17,556 trades. The market capitalisation stood at Rs 68,36,932 crore.