Shares of rate-sensitive sectors were mixed after the Reserve Bank of India (RBI) kept the repo rate unchanged at 4 percent for the sixth consecutive time.
While banks and financial stocks were largely in the red, the realty index rose as much as 1 percent in intra-day deals and the auto sector added around 0.3 percent.
The RBI's monetary policy committee maintained status quo on the key rates, in line with the expectations, amid uncertainty over the pace of economic recovery as India continues its fight against COVID-19. The RBI's real GDP growth projection for FY22 is now 9.5 percent versus 10.5 percent earlier.
"Unlike the first wave of Covid-19, where economy came to a standstill, economic impact during the second wave will be contained," governor Das said. CPI inflation has been projected at 5.1 percent in FY22.
In the banking space, most stocks were in the red with Bandhan Bank, IDFC First Bank, Punjab National Bank, HDFC Bank, SBI, and RBL Bank down 1-2 percent. Meanwhile, financials including Power Finance Corporation, REC, HDFC, ICICI Prudential, M&M Finance and Bajaj Finance were trading in the green.
Among other financials, ICICI General Insurance and Cholamandalam Finance were in the red, around half a percent lower.
In the auto space, M&M, Motherson Sumi, MRF and Hero MotoCorp were up 0.5-1 percent while Phoenix Mills, Brigade Enterprises, Godrej Properties, Sunteck Realty and Prestige Estates from the real estate sector were up in the range of 0.5 percent to 2 percent.
"The announcement of G-SAP 2.0 to the tune of Rs 1.2 lakh crore will ensure adequate liquidity in the system. On tap liquidity window for contact intensive sectors is an unconventional measure to mitigate the sufferings of segments like hotels, restaurants, tourism, bus operators, beauty parlours, saloons etc. Upward revision of inflation rate will raise bond yields marginally in the short run," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.