Sensex tumbles 661 pts on RBI’s cautious comments; monsoon woes
Indian market tumbled to their lowest levels in two-and-half weeks as investors dumped shares reacting to RBI’s cautious comments even as it cut policy rates. Deficient monsoon forecast for the year by the Met Department and disappointing core sector output data raised worries about economic recovery, further dampened the sentiment adding to market rout.
The ferocity of selling was intense and indiscriminate as all sectoral indices bore the brunt of massive unwinding even Mid-cap and Small-cap stocks got badly mauled in the carnage <g data-gr-id="35">senting</g> the Sensex and Nifty sliding by over 2 per cent. Earlier, the market started on a positive note, but the euphoria short-lived even as the apex bank slashed key policy rates by 0.25 basis points to 7.25 per cent for the third time this year, but keeping the CRR and SLR rates unchanged at 4 percent and 21.5 percent, respectively. But the spirits dampened as the RBI chief cautioned over <g data-gr-id="37">future</g> rise in inflation in the midst of deficient <g data-gr-id="36">rain fall</g> and no further rate cuts to be expected.
Rate sensitive stocks led by realty, banking & financials, auto <g data-gr-id="32">alongwith</g> <g data-gr-id="33">fmcg</g>, healthcare, capital goods, power, metal and technology stocks suffered the most as intense selling remained unabated throughout the day. The 30-share index opened at 27,890.73 and moved between 27,902.53 and 27,146.68 before ending at 27,188.38, revealing a sharp loss of 660.61 <g data-gr-id="31">points,</g> or 2.37 <g data-gr-id="34">per cent</g> over its previous close.
The barometer had gained 342.28 points in the last two sessions. The broader 50-share Nifty also plummeted by 196.95 <g data-gr-id="30">points,</g> or 2.34 <g data-gr-id="25">per cent</g> to finish at 8,236.45. Elsewhere, <g data-gr-id="27">baring</g> China, most Asian markets ended lower with key indices Taiwan, Singapore, Japan, <g data-gr-id="26">Honkong</g> and South Korea falling by 0.05 per cent to 1.34 per cent. European stocks <g data-gr-id="29">too</g> are trading lower over <g data-gr-id="28">ongoing</g> uncertainty of Greek debt situations. .
“As expected anything less than 50 bps is not being welcomed by the market. RBI has highlighted risk from below normal monsoon, food inflation, increase in crude prices and external environment,” said Vinod Nair, Head-Fundamental Research at Geojit BNP Paribas Financial Services. Other prominent losers on the Sensex were Hindalco, ITC, Hero MotoCorp, Cipla, HUL, Bajaj Auto, M&M, Wipro, Tata Steel, Sun Pharma, L&T and Coal India.