Mumbai, Dec 2 (IANS): A benchmark index of Indian equities markets plunged 156 points or 0.55 percent, as the Reserve Bank of India (RBI) decided to keep key interest rates unchanged in its fifth bi-monthly policy review of the current fiscal.

Heavy selling pressure was seen in auto, banking and IT sectors, while good buying was observed in the healthcare sectors and capital goods.

The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 28,522.46 points, was trading at 28,403.62 points (at 11.58 a.m.), in the pre-noon session down 156 points or 0.55 percent from the previous day's close at 28,559.62 points.

The Sensex touched a high of 28,576.39 points and a low of 28,386.46 points in the trade so far.

RBI Governor Raghuram Rajan said that he will wait and watch the inflation situation before going in for the rate cut.

"After 4-5 years of very high inflation. We want the lowering in inflation to be for real and we don't want any flip-flop going forward if there is some dramatic change tomorrow. There should be change and change should be for good," Rajan said.

The markets were hoping against hope for a rate cut by the RBI, as recent economic data showed easing of retail and consumer inflation coupled with a down turn in industrial and gross domestic product (GDP) expansion.

The S&P auto index plunged by 248.40 points, bankex went down by 117.20 points and IT index slipped by 110.31 points. However, capital goods index gained by 60.83 points and healthcare index moved up by 67.29 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading 43.25 points or 0.51 percent down at 8,512.65 points.