The banking sector stocks extended losses after the RBI kept Repo rate unchanged in its monetary policy decision today.
BSE Bankex which constitutes 10 key banking stocks from the BSE 500 closed 348 points or 1.23 percent lower at 28,110 level.
All 12 components of the BSE Bankex ended in the red after the RBI monetary policy committee announced its decision. SBI, Bank of Baroda and Punjab National Bank and Canara Bank were down over 2 percent each.
Bank Nifty was down 273 points to 24,851 level with SBI, PNB, and Canara Bank losing over 2 percent each. All 12 bank Nifty components closed in the red.While the Sensex fell 205 points to 32,597, Nifty was down 74 points to 10,044 level.
The Reserve Bank of India kept its policy rate unchanged on Wednesday, as widely expected, after inflation accelerated to a seven-month high and stronger economic growth reduced the need for monetary stimulus.
All but two of 54 analysts in a Reuters poll had predicted the repo rate would be left for a second straight meeting at 6.00 percent, its lowest since November 2010.
The RBI also kept the reverse repo rate unchanged at 5.75 percent.
Wednesday's decisions were widely predicted after the annual rate of consumer inflation increased in October to 3.58 percent, driven by higher food and crude oil prices. That's still low by Indian standards, but not far from the central bank's 4 percent target.