Mumbai, Dec 2 (IANS): A benchmark index of Indian equities markets plunged 116 points or 0.40 percent, as the central bank decided to keep key interest rates unchanged in its fifth bi-monthly policy review of the current fiscal.

The move by the Reserve Bank of India (RBI) resulted in heavy selling in auto, information technology (IT) and oil and gas sectors, while healthy buying was observed in healthcare, metal and capital goods.

The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 28,522.46 points, closed at 28,444.01 points (provisional), down 115.61 points or 0.40 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 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 201.81 points, IT went down by 167.20 points and oil and gas index which slipped by 69.99 points.

However, healthcare index gained by 140.76 points, metal index was higher by 132.76 points and capital goods index moved up by 117.57 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed trade in red. It was down 31.20 points (provisional) or 0.36 percent at 8,524.70 points.