India's central bank cuts rates by 25 bps as expected

RBI Monetary Policy 25 bps rate cut insufficient to revive real estate demand

Asian stocks edged higher on Friday, thanks to gains on Wall Street, but the mood was cautious before a key United States job report that could help determine whether the Federal Reserve cuts interest rates further, Reuters said.

The central bank lowered its economic growth projection for the current financial year to 6.1 per cent, from 6.9 per cent in August.

- All sectoral indices, except Nifty IT, ended lower for the day. The RBI had cut the repo rate by 35 basis points in the last policy review in the last policy review in August.

However, US markets on Thursday ended higher on rate cut expectations.

Yes Bank's shares zoomed almost 34 per cent on Thursday, halting their fives day of continuous fall, after the company said its financials are strong, with the liquidity position well in excess of regulatory requirements.

Vinod Nair, head Of research at Geojit Financial Services, commented that despite the RBI's and the government's synchronised efforts to offset a slowdown in the economy, investors have taken a pessimistic view due to continued downward revision in GDP estimate and new stress in the banking system. "A 40-50 bps would have been commensurate along with a dovish guidance."A 25-basis point cut was already discounted in the market, so investors are unlikely to react strongly", said Anita Gandhi, a director Arihant Capital Markets Ltd". Wipro, TCS, Tech Mahindra and Infosys each gained about a per cent in an otherwise subdued market sentiments.

USA stock futures ESc1 fell 0.15 percent in Asia on Friday, though that followed a 0.80 percent increase in the S&P 500 on Wall Street overnight on hopes that future Fed rate cuts will support corporate profits.

The broader markets also came under pressure with BSE midcap index falling 0.9% and smallcap index 0.8%. As many as 256 stocks hit their 52-week low levels while 346 scrips hit the lower circuits.

Baijal further said that factors such as slowing economic output, rising unemployment rate and low consumer confidence have hindered the percolation of these small quantum rate cuts to the economy at large.

Equities in Europe were trading lower in early sessions. Chinese markets are closed for a holiday. Brent crude futures, the global oil benchmark, advanced 0.78 per cent to $58.16 per barrel.