Mumbai: The equity markets plunged sharply on Tuesday amidst profit booking as weakness in global stocks and lower than expected rate cut by the Reserve Bank of India (RBI) dented sentiments.
The Sensex slumped 516.06 points or 2.03 per cent to end the day at 24,883.59 while the Nifty ended the day at 7,603.20, losing 155.60 points or 2.01 per cent. “Initially the markets expected a 25 basis point cut in interest rate by RBI after the Union finance minister said the government would stick to its medium term fiscal consolidation roadmap while announcing the budget.
However, in the last few trading session, a certain section of the market participants started building up position expecting that RBI might go for an aggressive 50 basis point cut in repo rate,” pointed out Ambareesh Baliga, senior research analyst adding that the weakness in global stocks further disappointed investors.
According to the provisional data released by the stock exchanges, FPIs sold shares worth Rs 800.79 crore. Global markets witnessed broad-based sell-off as weakness in oil prices renewed concerns regarding global growth outlook. In the domestic market interest rate sensitive bank stocks witnessed heavy selling pressure. While India’s largest public sector lender SBI slumped 5.38 per cent, the shares of ICICI Bank fell 5.45 per cent on the BSE.
