Benchmark Sensex fell 129 points today after the Reserve Bank cut repo rate by 25 bps, which was in line with market expectations.
Traders said the RBI’s decision to lower the policy rate to 6 per cent failed to boost sentiment.
This is the first rate cut since October 2016 and the interest rate is now at a 6-year low.
They added that no change in cash reserve ratio (CRR) too had a bearing.
The 30-share index, which had retreated from record highs in late morning trade, was trading down 128.80 points, or 0.40 per cent, at 32,446.37 soon after the RBI announced its bi-monthly monetary review.
The barometer had touched an all-time high of 32,686.48 (intra-day) in the opening trade.
The wider index Nifty too slipped from a record high by falling 45.95 points, or 0.45 per cent, to 10,068.70. The gauge had touched an all-time high of 10,137.85 at the outset today.
In the wake of record low retail inflation, the monetary policy committee (MPC) headed by RBI Governor slashed policy repo rate by 25 basis points to 6 per cent and reverse repo by a similar proportion to 5.75 per cent.
The central bank also retained the growth forecast at 7.3 per cent for the current fiscal.
The banking index, however, was marginally up by 0.14 per cent as shares of state-run SBI rose 0.24 per cent, Axis Bank 0.77 per cent and ICICI Bank 0.25 per cent.
However, the BSE realty index was 0.27 per cent down while auto shed 0.16 per cent.