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BSE Sensex tanked more than 600 points after RBI announcement of credit policy with banks leading the fall.

Sensex was trading at 71,523.08 points down by a massive 628.92 points or 0.87 per cent.

Axis Bank, ICICI Bank, Nestle are down more than 2 per cent. The private banks index is down more than 1.5 per cent. Au Bank is down 2 per cent, Kotak Mahindra Bank is down 2 per cent.

FMCG stocks are down with the index falling 1.2 per cent. Tata Consumer is down 2 per cent, Britannia is down 2 per cent, Jyothy Labs is down 3 per cent.

Suman Chowdhury, Chief Economist and Head - Research, Acuité Ratings & Research said it was no surprise that RBI MPC decided to keep the status quo on the interest rates for the sixth consecutive time. However, RBI continued to sound hawkish as against the market expectations and has not provided any indication of the timing of the change in monetary stance from “withdrawal of accommodation".

Chowdhury said given the tone of the MPC statement and the expectation of growth buoyancy, we believe that the likelihood of any rate cut by RBI has significantly reduced over the next six months.

"In our opinion, the short term rates will continue to remain high in the near term. We also expect bank deposit rates to show an increase by 25-50 bps, given the continuing gap between credit and deposit growth," said Chowdhury.