6:00 PM Mumbai Ė Sensex in Mumbai plunged more than 2% after Reserve Bank of India cited rising inflation risks and suggested that the latest rate cut may not be followed with additional cuts. Hero MotoCorp, Bajaj Auto and M&M sales decline. Tata Motors total sales jumped 5%.
Reserve Bank of India lowered interest rate by 25 basis points however citied rising inflation risks and oil price in international markets.
Reserve Bank of India cut interest rates by 25 basis points to 7.25%. The rates have been cut for the third time this year.
Governor Raghuram Rajan also said inflation risks are rising on the back of rising crude oil prices, weaker-than-normal monsoon and weak global economic environment.
The central bank also lowered its fiscal year annual economic growth rate to 7.6% from the previous outlook to 7.8%.
Rupee weakened 13 paisa to 63.83 against one U.S. dollar.
The Sensex Index plunged 660.61 or 2.4% to close at 27,188.38. The CNX Nifty decreased 196.95 or 2.3% to 8,236.45.
Gainers & Losers
Adani Ports and Special Economic Zone Limited
advanced 1.1% to ₹315 after the port services provider said Reserve Bank of India increased foreign investment limit in the company to 40%.
Aurobindo Pharma Ltd
plunged 2.7% to ₹1324.80 after the natural and ayurvedic medicine maker received the approval from the U.S. health regulatorís to manufacture and market metronidazole tablets used to treat various kinds of infections.
Bajaj Auto Limited
fell 0.7% to ₹2,320.55 after the automobile maker said total sales in May decreased 2% to 345,438 units compared to 351,436 units in the same month a year ago.
Bharat Heavy Electricals Limited
fell 1% to ₹251.30 after the power generation equipment maker plans to set up 4,000 megawatt thermal power plant of Telangana State Power Generation Corp. Ltd at Yadadri for about ₹17,950 crore.
Coal India Limited
decreased 1.9% to ₹383.60 after the largest coal minerís subsidiary achieved 98% of targeted production at 40.97 million tons in May.
Hero MotoCorp Limited
declined 3.2% to ₹2,621.80 after the largest motorcycle maker said May total sales decreased 5.4% to 569,876 units compared to 602,481 units in the same month last year.
Mahindra & Mahindra Ltd
declined 2.6% to ₹1,223.30 after the tractor maker reported total sales in May fell 3% to 36,706 units compared to 37,869 units in the same period last year.
The domestic sales in the month fell 6% to 33,369 units compared to 35,499 units but exports sales in the month soared 41% to 3,337 units compared to 2,370 units in the same month year ago.
Tata Motors Limited
fell 0.6% to ₹469.50 after the vehicles maker reported total sales in May including exports rose 5% to 39,496 units compared to 37,538 units in the same period last year.
Reliance Industries Limited
increased 1.1% to ₹910.90 after the conglomerate plans to sell its 49.9% stake in its U.S.-based Eagle Ford Shale oil and gas transportation and distribution joint venture for $1.07 billion.