Mumbai, Oct 25 (IANS): A benchmark index for Indian equities markets fell sharply Tuesday after the Reserve Bank of India in its second quarter policy review lowered growth estimates for the current fiscal, while hiking the repo rate by 25 basis points.

The 30-scrip sensitive index (Sensex) of the BSE, which opened at 17,012.79 points, fell to 16,900.26 points, 39.02 points from its previous close at 16,939.28 points soon after the RBI announcement.

It fell from an intra-day high of 17,124.68 points.

The 50-scrip S&P CNX Nifty of the National Stock Exchange similarly fell, and was ruling 0.12 percent lower at 5,092.15 points.

The fall was the most in banking and other interest rate sensitive sectors such as realty and consumer durables.

At the broader markets, the BSE midcap index fell 0.46 percent, while the smallcap index was trading 0.57 percent down.

While announcing the second quarterly review, the RBI also revised economic growth projections for the current fiscal downwards to 7.6 percent from the earlier prediction of 8 percent.

"The projection was on the downside mainly on account of slowing down of the global economy and moderating domestic demand," said Governor Duvvuri Subbarao while presenting the review.

The repurchase rate, or the interest the central bank levies on short-term borrowing by commercial banks was raised to 8.5 percent from 8.25 percent. Automatically, the reverse repurchase rate, or interest on short-term lending, gets hiked to 7.5 percent from 7.25 percent.

The RBI, however, maintained the projection of annual inflation and said it would be at 7 percent by March 2012.