Losses were however capped after RBI in its bimonthly policy review yesterday cut its inflation projections and delivered a less hawkish stance. The central bank yesterday kept the repo rate unchanged at 6.25%, in line with Street expectations.
In global markets, Asian shares wobbled as investors braced for any surprises from the UK election and other global events lined up for the week. MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, through China edged up on unexpectedly solid trade data, while Japan's Nikkei dropped 0.4%.
At 1:21 pm, the S&P BSE Sensex was trading at 31,231, down 39 points, while the broader Nifty50 was ruling at 9,661, down 2 points.
The broader market outperformed with the S&P BSE Midcap and the S&P BSE Smallcap indices adding 0.3% and 0.4% respectively.
Dr Reddy's, Sun Pharma, Tata Steel, Cipla and GDFC gained the most on the index while TCSm GAIL, M&M and Asian Paints fell the most.
Financial stocks edged higher, with Kotak Mahindra Bank and Federal Bank leading after RBI made it easier for India's stressed banks to lend, cutting their statutory liquidity ratio by 50 basis points to 20 percent of total deposits from June 24.
BSE IT index was the biggest sectoral loser, down 1.5% dragged by TCS and Infosys. TCS fell over 3.5% becoming the top loser on BSE Sensex while Infosys was down 1.5% .
Reliance Communications continued their slide, after the embattled mobile carrier pushed back against Moody's and Fitch, disagreeing with their rating downgrades earlier on Wednesday. Shares fell as much as 2.8% to their lowest in over a week.
Petronet LNG fell as much as 4.3% to their lowest in over two weeks amid reports that GDF International sold its entire 10% stake of 75 million shares.
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