(Bloomberg) -- India stocks erased early gains after the central bank cut rates by 25 basis points, matching market expectations.
The S&P BSE Sensex 30 was little changed as of 12:01 p.m. in Mumbai. The Nifty was down 0.1%. Twenty eight out of 39 economists in a Bloomberg survey had predicted a 25 basis point cut.
The easing of monetary policy adds to efforts by the government last month to revive economic growth with corporate tax cuts. Sentiment has been damped, however, by questions over a potentially renewed crisis in India’s financial sector, a year after the collapse of major infrastructure lender IL&FS.
“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. “But in the long term it should help with interest cost and generating demand in the economy.”
