Real estate stocks are the worst hit as a cut in interest rates would have helped banks lower EMIs which would have in turn helped real estate companies in increasing their sales.

At 12.45 PM, the 30-share Sensex is down 164 points at 28,340 after hitting an intra- high of 28,641 while the 50-share Nifty has shed 52 points at 8,608 after touching a high of 8,694 in early trades.

The broader markets are, however, outperforming the benchmark indices. The BSE Mid-cap index has gained 0.2% and the Small-cap index is up 0.4%.

Reserve Bank Governor Raghuram Rajan on Tuesday held repo rate unchanged at 7.5 per cent, as expected. A status quo on interest rate was anticipated because Dr Rajan had earlier this year announced back-to-back repo cuts, both times outside the policy meetings.

Another key ratio, the CRR or cash reserve ratio, which is the amount of deposits lenders must keep with the RBI, was also left unchanged at 4 per cent. This means interest rates on home and auto loans are unlikely to come down immediately, analysts said.

“RBI has maintained status quo as per the expectations. RBI affirmed its continuance of accommodative monetary stance but conditioned its further easing on evolution of transmission of earlier cuts especially in bank lending rates. We believe RBI will like to assess the effect of un-seasonal rains and also projections of monsoon to see its effect on food inflation. As we have highlighted before government policy actions remains key to create room for lower interest rates.

To sum up, Inflation has to undershoot RBIs projection of 5.80% for more easing to come. We believe if government continues to address supply constraints inflation can surprise on downside and create space for more 25 to 50bps of easing and bond yields will eventually drop to 7.50%” said Kunal Shah, Fund Manager - Debt, Kotak Mahindra Old Mutual Life Insurance Limited.

“The status quo was on expected lines with minimal monetary transmission since the last repo cuts and weather disturbances. We expect credit offtake to rise as consumer demand picks up in the economy ensuring a better transmission of RBI's policy moves going forward. We expect repo to come down by 50 bps in the current fiscal.” adds Debopam Chaudhuri, Chief Economist, ZyFin Research

Brent crude falls more than 1 percent, paring overnight gains of nearly 6 percent, after Goldman Sachs said prices needed to remain low for months to achieve a slowdown in U.S. output growth.

The rupee has shed 12 paise at 62.31 against the US dollar today at the Interbank Foreign Exchange due to appreciation of dollar overseas.

On the sectoral front, BSE Realty, Bankex, Auto and Healthcare indices are trading lower up to 2.5%. However, BSE Metal, Consumer Durables indices are trading higher up to 0.7%.

Shares of interest-rate sensitive such as realty, auto and bank stocks are trading lower after the Reserve Bank of India (RBI) kept the repo rate unchanged in its first bi-monthly monetary policy statement for 2015-16.

Real estate stocks are the worst hit as a cut in interest rates would have helped banks lower EMIs which would have in turn helped real estate companies in increasing their sales. NBCC, Oberoi Realty, Pheonix, Godrej Property, Unitech, Indiabulls Real Estate, Sobha Developers, DLF, Prestige Estates are trading lower up to 4%.

Financials and auto stocks have declined across the exchange post the RBI monetary policy. Tata Motors, Hero Motocorp, Axis Bank, ICICI Bank, Maruti Suzuki and HDFC Bank are trading lower up to 2%.

State-run NTPC is looking at bringing its coal import bill to 'zero' in the next five years and will rely on the fossil fuel made available by Coal India and the company's own mines. The stock is up 1.7%.

Bajaj Auto which lost sheen on yesterday’s trade on reporting a 22 per cent fall in motorcycle sales at 2,09,937 units in March has bounced back in today’s trade and is trading high up to 3%.

Metal stocks are gaining sheen in today’s trade. Sesa Sterlite, Tata Steel and Hindalco are trading high up to 1.5%.

Larsen & Toubro (L&T) today said its construction arm has bagged orders worth Rs 5,492 crore across various segments in March. The stock is up 0.7%.

The overall breadth of the BSE midcap remains positive as 1,245 stocks are advancing while 1,183 stocks are declining.