Equity benchmark index Sensex erased early sharp gains to close lower by 131 points on Friday, snapping its three-day rising streak as concerns over an impending recession heightened after the RBI said the projected annual growth was at risk due to the COVID-19 outbreak.
In a bid to support the economy during the pandemic, RBI Governor Shaktikanta Das unveiled a slew of measures, including its steepest interest rate cuts in more than 11 years. The repo has been cut by 75 basis points to 4.4 per cent - the lowest in at least 15 years.
After opening significantly higher, the 30-share BSE barometer gave up all the gains to end 131.18 points or 0.44 per cent lower at 29,815.59. It hit a high of 31,126.03 and a low of 29,346.99 in day trade.
On the other hand, the broad-based NSE Nifty closed 18.80 points, or 0.22 per cent, higher at 8,660.25.
Despite massive rate cuts, domestic market turned negative on concerns over the annual economic growth amid rising uncertainty over the COVID-19 pandemic, traders said.
Announcing the decisions of the Monetary Policy Committee (MPC), RBI Governor Das said that no projection for growth and inflation was being given in view of the uncertainty created by outbreak of the deadly virus.
Upasna Bhardwaj, Sr. Economist, Kotak Mahindra Bank said, "RBI, very correctly so, announced a comprehensive bazooka covering all aspects of the economy by taking measures system-wide both through liquidity, rates and regulatory forbearance (retail as well as for industry) and also targeted measures to manage the corporate bond markets."
She added, "The measures should help in tiding through the end of the year issues which many banks/institutions were fearing and will go a long way in cushioning the dislocations in various markets. We expect additional scope for 40-50bps of rate cut with any further easing and extension of measures depending on the nature of spread of COVID-19."
Meanwhile globally, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended higher, while benchmarks in Europe were trading in the red.
International oil benchmark Brent crude fell 2.20 per cent to USD 25.76 per barrel in futures trade.
On the currency front, the rupee depreciated marginally to 75.20 against the US dollar in intra-day trade.
The death toll due to COVID-19 rose to 17 in the country on Friday and the number of coronavirus cases climbed to 724, according to the Health Ministry.
The number of deaths around the world linked to the new coronavirus has crossed over 24,000.
