An industry survey has showed that economic growth for the current fiscal may slip to 4.8 per cent from 5 per cent estimated earlier.
Top gainers include Yes Bank, HUL, Vedanta, NTPC, Bharti Airtel, Adani Ports, PowerGrid and Tata Motors, rising up to 5 per cent.
Many analysts argue with limited space for a fiscal stimulus, the burden of lifting growth lies squarely on monetary policy.
Investors were anxious concerned about the uncertainties over the timing of Us Federal Reserve rate hike, US policies under President Donald Trump, the upcoming French election and rising crude price that could impact inflation, going ahead. A weak closing in Asia tracking overnight losses in the US owing to all these unknowns triggered selling, brokers said.
CREDAI Chairman Lalit Jain said a long term status quo on interest rates would not help prospective home buyers.
Food prices rose 8.64 per cent year-on-year last month, slower than an annual rise of 9.90 per cent in March.
In the Sensex pack, M&M was the biggest loser, tumbling by 6.66 per cent, followed by TCS dropping 4.14 per cent.
Issuers are currently not comfortable with the bids they have been getting for their bond offerings.
The rupee slipped from its initial gains by 5 paise against the US currency to 67.89 in late morning deals on bouts of dollar demand from importers.
Reserve Bank Governor Raghuram Rajan expressed confidence in India's growth and said the country is on target to meet Jan inflation target of below 6%.
Rajan's departure from the RBI is an end to 'outside interference' in policy making, government insiders feel.
Bank Nifty pared all its intraday gains to end over 1% lower led by losses in BoB, ICICI Bank, Axis Bank and Bank of India
In the RBI's monetary policy statement review, Governor Raghuram Rajan said banks could extend timelines for large stalled projects by bringing in new 'promoters', or owners.
Recovery in the equity market also boosted the rupee value against the dollar, a forex dealer said
Reserve Bank of India Deputy Governor Viral Acharya is the eighth economist to quit since the Modi government took office.
The Reserve Bank on Tuesday cautioned that continued uncertainty over monsoon could stoke food inflation, but expressed the hope that government policies will improve supplies in the coming months.
Pressure has been mounting on the Reserve Bank of India to cut interest rates in the wake of declining retail inflation and the need to fuel growth momentum. However, the RBI will have to do a tightrope walk as globally interest rates are inching upwards.
'Long-term retail investors should not worry about these sharp dips and jumps if they have chosen their stocks wisely.' 'Short-term volatility is a given and a rise and fall of two-three per cent should not worry them.'
At the close, the 50-share NSE Nifty was at 8,611.15, up 19.90 points, or 0.23 per cent, after moving between 8,637.15 and 8,555.20.
While the RBI can nudge things along, ultimately bank owners must recapitalise and review internal processes to ensure that a culture of irresponsible lending doesn't continue, says Devangshu Datta.
'The government and the RBI have been playing a very good part in terms of inflation management.'
Probably in August. We can argue whether RBI is dovishly neutral or neutrally dovish but the telltale signs of at least one more rate cut are strewn all over the policy statement, points out Tamal Bandyopadhyay.
The rupee had gained by 50 paise or 0.75 per cent in two weeks.
The 30-share S&P BSE Sensex ended up 130 points at 25,400 and the Nifty50 rose 46 points to close at 7,759.
'You can put 25 per cent right now; put another 25 per cent when Nifty corrects another 500 points.' 'At 13,500 put another 25 per cent and at 13,000 one can get fully deployed.'
Unless RBI temporarily relaxes the norms on recognising of bad loans, the pressure on this front could rise in the December quarter.
Subbarao's remarks come against the backdrop of Finance Minister P Chidambaram's assertions in recent weeks that RBI should not focus solely on containing inflation but also look at the larger mandate of growth and job creation.
Vivek Mahajan (Head - Research) Aditya Birla Money, analysed the slow IIP growth.
CRR to remain unchanged at 4.00 pc this fiscal
If you have availed a home loan from an NBFC, you can shift your existing home loan to a bank and benefit from the MCLR regime, suggests Ratan Choudhary, head - home loans, Paisabazaar.com.
Top gainers among the S&P BSE Sensex include GAIL, Dr Reddy's Laboratories and Bharti Airtel, all edging up by 1% in late morning deals
The monetary authority said it was worried on three fronts with regard to inflation as well as the economy.
But this might not be the best time to enter these, as probability of further reductions in near future is low
RBI said inflation in the second half of the current fiscal is projected at 2.7-3.2%. It retained its GDP forecast for the current fiscal at 7.4%
The S&P BSE Sensex ended down 371 points at 24,966 and the Nifty50 closed 101 points lower at 7,615.
Thanks to Rajan we are an inflation-targeting country now
For existing investors, it may be prudent to redeem their current investments in gilt or dynamic schemes and invest it in short-term funds, if the exit load is not very high, advises Malhar Majumder.
The top losers from the Sensex pack are ONGC, Coal India, Vedanta, Reliance Inds and L&T.
Markets shrugged off RBI's neutral stance on key policy rates.
The benchmark BSE Sensex reclaimed the 28,000 mark, spurting by 409 points or 1.4% at 28,114 and Nifty settled above the 8,500 mark at 8,532, gains of 111 points.
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