Benchmark indices as well as broader markets dropped over one per cent as focus remained on global market movements amid falling oil prices. The RBI’s decision to maintain status quo on benchmark interest rate dragged bank stocks.

S&P BSE Sensex and Nifty 50 fell 1.15 per cent and 1.33 per cent to 24539 and 7455.55 respectively. Broader market indices like Nifty Midcap 100 and Nifty Smallcap 100 fell 1.4 per cent each.

All indices were in red with sectors like metals, energy and public sector companies being the major losers. However, Bharti Airtel, Bajaj Auto, Lupin, Dr Reddy’s Laboratories, Hindustan Unilever, HDFC and ITC were top gainers on the Nifty 50.

On the global front, European markets were trading sharply lower as concerns over oil prices returned to haunt markets. France's CAC, Germany's DAX and Britain's FTSE were down 1.1-2 percent. Asian markets ended mixed with the Shanghai up 2.3 percent. Oil prices fell, dented by worries about the demand outlook and rising supply, while hopes for a deal between OPEC and Russia on output cuts faded. Brent crude and US oil plunged more than 3 percent.

Jayant Manglik, President, Retail distribution, Religare Securities said that alignment of Nifty and banking pack would trigger the next directional move or else consolidation will endure. “Continuous underperformance from the banking space is what hurting the sentiments most,” he said.

Nifty Bank and Nifty PSU Bank fell 1.6 per cent and 1.5 per cent lower despite Reserve Bank of India’s status quo on policy rates, which were in line with expectations.

RBI kept its benchmark interest rate namely the repo rate unchanged at 6.75 per cent. While retaining accommodative stance of the monetary policy, RBI Governor Raghuram Rajan put the ball in government’s court and data for future policy actions.

Dhananjay Sinha, Head- Institutional Research, Economist & Strategist, Emkay Global Financial Services believes that RBI could maintain status quo for longer period given the backdrop of the 7th Pay commission recommendations, upcoming state elections, absence of benefit of lower oil subsidy in FY17 and the rising pressure on central government to deliver the promised growth revival.

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