BENGALURU - Indian stock indexes fell and bond yields rose on Friday, after the Reserve Bank of India (RBI) cut interest rates for the fifth time this year as expected, in a bid to boost growth in Asia's third-largest economy.
The broader NSE Nifty was down 0.03% at 11,310.55 by 1237 local time (0707 GMT), while the benchmark BSE Sensex was higher by 0.05% at 38,126.47.
Both indexes had risen roughly 0.4% each earlier on Friday before the rate cuts were announced.
The benchmark 10-year bond yield <IN072629G=CC> rose 5 basis points to 6.64% after the central bank's announcement.
The rupee <INR=D4> rose 0.13% against the dollar at 70.8425, remaining largely unchanged after the news.
The RBI maintained its "accommodative" stance while announcing the rate cuts and said it would keep that position "as long as it is necessary" to revive economic growth, while ensuring inflation remains within target.
The six-member monetary policy committee (MPC) cut the repo rate <INREPO=ECI> by 25 basis points to 5.15%, in line with expectations. The reverse repo rate <INRREP=ECI> was reduced to 4.9%.
India's economy grew by just 5% in the June quarter, its slowest pace in more than five years, prompting the government to take measures aimed at boosting growth.
A sharp cut in the corporate tax rate - to 22% from 30% - last month brought cheer to markets, but economists say the move will do little to address a lack of spending power.
Leading stock indexes lower after the interest rate cut on Friday were banks, which have already suffered bruising declines in recent sessions.
The Nifty banks index was last down 0.88%, with Federal Bank Ltd's 3% drop leading losses on the index.
India's state-run banks were faring better, with the Nifty PSU banks index that tracks them rising 0.06%.