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Indian Market Ends Notably Lower Despite RBI Rate Cut

The Indian stock market ended notably lower on Wednesday, despite the Reserve Bank of India announcing a bigger-than-expected 35 basis points cut in the repo rate.

A downward revision in GDP growth forecast by the central bank to below 7% appeared to have prompted investors to exit counters. Worries over global economic slowdown, trade war and mixed quarterly earnings were among the other factors that contributed to the market's decline.

The BSE benchmark Sensex ended down 286.35 points, or 0.77%, at 36,690.50, about 80 points off the day's low of 36,610.57.

The broader Nifty50 index of the National Stock Exchange ended lower by 92.75 points, or 0.85%, at 10,855.50, after declining to a low of 10,835.90.

Automobile, bank, realty, metal and oil stocks were among the prominent losers. Information technology stocks found modest support, thanks to the rupee's decline against the dollar.

Mahindra & Mahindra ended lower by about 5.7% after the company said weak sentiment and liquidity crunch hurt its performance in the first quarter.

Tata Steel shed 4.75%. Tata Motors, State Bank of India, Vedanta, Axis Bank and ITC lost 2 to 4.2%. Reliance Industries and Larsen & Toubro also declined sharply.

Indiabulls Housing Finance tumbled more than 13% on disappointing results.

BPCL, Eicher Motors, UPL, JSW Steel, Grasim Indsutries and Indian Oil Corporation ended lower by 2.7 to 4.3%.

Zee Entertainment Enterprises gained nearly 3%. Cipla rose 2.8%. Yes Bank, Hindustan Unilever, Hero Motocorp and Wipro gained 1.2 to 2%.

IndusInd Bank, Bajaj Finserv, Tech Mahindra and Coal India posted modest gains. Infosys and Sun Pharmaceutical Industries edged up marginally.

The Monetary Policy Committee of the Reserve Bank of India today cut the repo rate by 35 bps to 5.40%.

The reverse repo rate under the LAF stands revised to 5.15%, and the marginal standing facility (MSF) rate and the Bank Rate to 5.65%.

The central bank revised downwards its real GDP growth outlook for 2019-20 from 7% in the June policy to 6.9%. GDP growth for the first quarter of 2020-21 has been projected at 7.4%.

The bank kept the retail inflation within its target level for over 12-month, and has projected it to stay within a band of 3.5-3.7% during the second half of this fiscal.

CPI retail inflation is projected at 3.1% for the second quarter this fiscal.

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