MUMBAI: Markets nursed losses for the second straight session on Thursday after the RBI slashed the interest rate but lowered the GDP growth forecast for 2019-20 and kept its monetary policy stance 'neutral' amid uncertainty over monsoon.
Lacklustre services data, depreciating rupee and weak overseas cues also weighed on trading sentiment, brokers said.
After a volatile session, the BSE Sensex settled 192.40 points, or 0.49 per cent, lower at 38,684.72. The broader NSE Nifty dropped 45.95 points, or 0.39 per cent, to end at 11,598.
In a bid to boost the sluggish economy before elections, the RBI Thursday cut the policy rate by 25 basis points for the second time in as many months, a move that may translate into lower EMIs for home and other loans. The repo rate now stands at a one-year low of 6 per cent.
However, the central bank added that the domestic economy is facing headwinds, especially on the global front, as it lowered its economic growth forecast for 2019-20 to 7.2 per cent from 7.4 per cent estimated in February. It also kept its monetary policy stance 'neutral' amid uncertainty over monsoon.
Rate-sensitive stocks ended on a mixed note, with the BSE auto and realty indices rising up to 0.61 per cent, while the BSE bankex lost 0.67 per cent.
TCS was the biggest loser in the Sensex pack, sliding 3.17 per cent, followed by HCL Tech, Yes Bank, IndusInd Bank, RIL, Kotak Bank, ICICI Bank, Tata Steel, L&T and Infosys, down up to 2.34 per cent.
On the other hand, Tata Motors, Hero MotoCorp, Bharti Airtel, HDFC, Asian Paints, Vedanta and Sun Pharma were among the top gainers, rising up to 2.49 per cent.
"Investors turned cautious about the downward revision in GDP growth to 7.2 per cent for FY20 while premium valuation and concerns over monsoon further impacted the sentiment," said Vinod Nair, Head of Research, Geojit Financial Services.
Meanwhile, the country's services sector activity eased in March, with the slowest pace of output growth in six months due to a slower expansion in new work.
The seasonally adjusted Nikkei India Services Business Activity Index fell to 52 in March from 52.5 in February.
Sectorally, BSE IT, energy and oil and gas indices suffered most losses, shedding up to 1.53 per cent.
Broader indices too ended in the red, with the BSE Midcap and Smallcap indices slipping up to 0.32 per cent.
The rupee depreciated 63 paise to 69.04 against the US dollar intra-day.
Foreign institutional investors (FIIs) pulled out Rs 1,040.48 crore Wednesday, and domestic institutional investors (DIIs) sold equities to the tune of Rs 80.83 crore, provisional data available with stock exchanges showed.
Global markets slipped from eight-month highs as investors fretted over the progress of US-China trade negotiations.
In Asia, Korea's Kospi rose 0.15 per cent, Japan's Nikkei inched up 0.05 per cent and Shanghai Composite Index gained 0.94 per cent. Hong Kong's Hang Seng declined 0.17 per cent.
In Europe, Frankfurt's DAX was down 0.03 per cent, Paris CAC 40 fell 0.31 per cent, while London's FTSE slipped 0.57 per cent in early deals.
The benchmark Brent crude futures fell 0.39 per cent to USD 69.04 per barrel.