Mumbai: The Sensex plunged 541 points and the Nifty 165 points following a cocktail of negative news ranging from a China state group warning of bond default, a state government issuing through the RBI a bond paper at 8.1 per cent and ADB revising downward India’s growth rate.
The fact that a state government issued paper at 8.1 per cent a week before the RBI’s credit policy announcement was taken as an indication that the Reserve Bank of India may not reduce interest rates when there were hopes of a cut in rates by a quarter per cent.
This was further aggravated by the European markets opening in the red, said independent analyst Ambareesh Baliga. He said, “the performance of the markets on Wednesday will be important as the Nifty could get support at 7,550.”
