The major Sensex gainers were: Mahindra and Mahindra, up 2.10 percent at Rs.1,209.45; Bajaj Auto, up 1.85 percent at Rs.2,131.85; Sun Pharma, up 1.28 percent at Rs.771.10; ONGC, up 1.17 percent at Rs.397.10; and Infosys, up 0.82 percent at Rs.3,490.95."
Mumbai, Aug 5 - Equated monthly installments (EMIs) paid on home, automobile and other loans would remain unchanged, as the Reserve Bank of India (RBI) left key interest rates unchanged in its third bi-monthly monetary policy review Tuesday.
The status quo in key policy rates would mean that the sectors like realty, automobile and other capital intensive industries will not get any relief from the high interest cost prevailing in the country to contain inflation.
Several sectors - like automobiles - have been struggling to keep up sales due to high interest and fuel costs which has dampened consumer sentiments in Asia's third largest economy.
Governor Raghuram Rajan said in his policy statement that RBI will continue to closely monitor inflation developments, and remains committed to the disinflationary path of taking Consumer Price Index (CPI) inflation to 8 percent by January 2015 and 6 percent by January 2016.
While inflation at around 8 per cent in early 2015 seems likely, it is critical that the disinflationary process is sustained over the medium-term, the governor said.
The repo rate, or the interest that banks pay when they borrow money from the RBI to meet their short-term fund requirements, has been left unchanged at 8 percent.
The reverse repo rate, or the interest that the RBI pays to commercial banks when they park their surplus short-term funds with the central bank, has been adjusted to 7 percent.
The Cash Reserve Ratio (CRR) is left unchanged at 4 percent. The marginal standing facility rate and the Bank Rate is also kept unchanged at 9 percent.
The statutory liquidity ratio (SLR), the mandatory amount of bonds lenders must keep with the RBI, was cut by 0.5 percent to 22.0 percent of their net demand and time liabilities (NDTL) with effect from August 9, 2014.
The central bank's action is on the expected lines as most analysts predicted a status quo, considering the macro-economic situation and current data.
There are upside risks in the form of the pass-through of administered price increases, continuing uncertainty over monsoon conditions and their impact on food production, possibly higher oil prices stemming from geo-political concerns and exchange rate movement, and strengthening growth in the face of continuing supply constraint, the policy statement said.
Data released earlier by the Central Statistics Office (CSO), showed that retail inflation based on Consumer Price Index (CPI) declined to 7.31 percent in June from 8.28 percent in the previous month.
The central and state governments are taking steps to contain the rising food prices by either directly selling edible commodities or easing grain imports.
The price of tomatoes has sky-rocketed in certain areas to nearly Rs.80-100 a kg.
Meanwhile, the markets turned bearish after the apex bank left key interest rates unchanged.
The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 25,817.84 points, was trading at 25,581.25 points (at 12.30 p.m.), down 141.91 points or 0.55 percent from the previous day's close at 25,723.16 points.
The Sensex touched a high of 25,831.53 points and a low of 25,562.36 points in the trade so far.
Sentiments were dampened as interest sentsitive stocks like metal, bank, capital goods and and oil and gas stocks plummeted.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading 35.20 points or 0.46 percent up at 7,648.45 points.
The major Sensex gainers were: Mahindra and Mahindra, up 2.10 percent at Rs.1,209.45; Bajaj Auto, up 1.85 percent at Rs.2,131.85; Sun Pharma, up 1.28 percent at Rs.771.10; ONGC, up 1.17 percent at Rs.397.10; and Infosys, up 0.82 percent at Rs.3,490.95.
The losers were: Coal India, down 1.61 percent at Rs.354.05; ITC, down 1.45 percent at Rs.349.10; Hero MotoCorp, down 1.41 percent at Rs.2,569.95; ICICI Bank, down 1.36 percent at Rs.1,471; and HDFC, down 1.31 percent at Rs.1,017.50.