Sensex slumps 792 points as move stumps investors
Mumbai, Oct. 5: Equity markets racked up heavy losses for the third straight session Friday after the RBI unexpectedly maintained status quo on rates but changed its stance to “calibrated tightening” amid the rupee breaching the 74mark.
The Sensex plunged 792.17 points to end at a near six-month low of 34,376.99, while the broader NSE Nifty dropped 282.80 points to 10,316.45.
This was the fifth straight weekly loss for the benchmarks. The Sensex declined by a massive 1,850.15 points or 5.10 per cent, and the Nifty lost 614 points or 5.50 per cent, this week.
The RBI on Friday unexpectedly maintained status quo on the benchmark interest rate but warned that rising oil prices and tightening of global financial conditions pose substantial risks to growth and inflation.
Reserve Bank changed its policy stance to ‘calibrated tightening’ from ‘neutral’, while affirming its commitment to achieve the mediumterm objectives to contain price rise.
Marketmen were expecting the Monetary Policy Committee to go for at least a 0.25 per cent hike at the review. Meanwhile, the rupee crashed below the 74level against the US dollar for the first time ever.
The domestic currency was quoting 65 paise lower at 74.23 (intra-day) against the dollar soon after the RBI announced its monetary policy.
The 30-share index remained in the negative zone through the session. Selling activity gathered momentum after the RBI’s decision, which dragged the index to a low of 34,202.22.