Sensex gets the blues before RBI meet, tanks 247 points
Mumbai: Spooked by a lacklustre European markets and a mixed closing in Asia, the benchmark BSE Sensex plunged over 246 points to close at 25,616.84 following some late sell-off as RBI got ready to announce its much-publicised bi-monthly policy review on Tuesday. The NSE Nifty gave in too, slipping below the 7,800-mark.
RBI Governor Raghuram Rajan is under pressure to cut the repo rate to a four-year low on Tuesday to 7 per cent and expectations for the same have skyrocketed, especially after the US Fed's status quo and a record low inflation here. Rajan has already eased the policy rate by 75 bps this year so far.
Retail inflation dropped to 3.66 per cent in August and economy grew at a slower pace of 7 per cent in the same month. Even IIP for July put up a dismal show and exports continue to remain in choppy waters.
The BSE Sensex opened higher, advanced to a high of 25,936.89 following the beginning of October series, but succumbed to profit-booking before ending at 25,616.84, loss of 246.66 points, or 0.95 per cent.
This is index's weakest closing level since 25,610.21 on September 11. The 50-share NSE Nifty slumped below the psychological 7,800-mark and settled down 72.80 points, or 0.93 per cent, at 7,795.70.
The risk-off trade was evident as Europe remained in a bearish grip where shares were trading in deep red after mining major Glencore sank to a record low on depressed commodity prices the world over. The China factor also added to the anxiety level as profits in major industrial companies saw their sharpest decline in four years last month.
"We are in a wait-and-watch scenario ahead of the RBI policy meet tomorrow. We believe that the market has already considered a rate cut of 25 bps, hence the commentary will be more important," said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services.
The BSE metal index fell by more than 2.50 per cent even as auto shares tumbled 1.74 per cent. Meanwhile, data showed foreign investors net sold shares worth Rs 115.10 crore on Thursday. Markets remained closed on Friday for Eid.