Banking and auto stocks came under pressure in noon trade after consumer
inflation rose to an 8-month high in June, dampening hopes of a rate
cut in near future.
The BSE banking index was down 0.50 per cent while auto index fell 0.80 per cent.
Among banking stocks, Kotak Mahindra Bank, State Bank of India, Federal Bank, ICICI Bank, HDFC Bank and Yes Bank were among the prominent losers, down 0.3-1 per cent each.
Tata Motors led the decline in auto stocks. The stock fell 2.3 per cent to Rs 393. Bharat Forge, Eicher Motors, Motherson Sumi Systems, Maruti Suzuki, Mahindra & Mahindra and MRF were also among the losers from the auto pack.
The consumer inflation, which is mostly tracked by the RBI, rose to 5.4 per cent in June, led by higher food prices. Food prices were up 5.48 per cent from 4.8 per cent in May. The consumer inflation data was released on Monday.
"Any hope of a rate cut in the near future is off the table now, given this kind of number, combined with the fact the monsoon has been weaker in the last couple of weeks," said Gaurav Kapur, senior economist at the Royal Bank of Scotland.
The RBI next policy review is scheduled for August 4.
The BSE banking index was down 0.50 per cent while auto index fell 0.80 per cent.
Among banking stocks, Kotak Mahindra Bank, State Bank of India, Federal Bank, ICICI Bank, HDFC Bank and Yes Bank were among the prominent losers, down 0.3-1 per cent each.
Tata Motors led the decline in auto stocks. The stock fell 2.3 per cent to Rs 393. Bharat Forge, Eicher Motors, Motherson Sumi Systems, Maruti Suzuki, Mahindra & Mahindra and MRF were also among the losers from the auto pack.
The consumer inflation, which is mostly tracked by the RBI, rose to 5.4 per cent in June, led by higher food prices. Food prices were up 5.48 per cent from 4.8 per cent in May. The consumer inflation data was released on Monday.
"Any hope of a rate cut in the near future is off the table now, given this kind of number, combined with the fact the monsoon has been weaker in the last couple of weeks," said Gaurav Kapur, senior economist at the Royal Bank of Scotland.
The RBI next policy review is scheduled for August 4.
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