Sensex slumps 286 points as RBI cuts growth forecast; rate-sensitive stocks tank
RBI reduced its growth projection for the Indian economy to 6.9 per cent for the current financial year.
Mumbai: The BSE Sensex slumped 286 points on Wednesday after the RBI slashed the benchmark lending rate but also lowered the growth estimate for the current financial year amid a slowdown in demand and investments.
After swinging 494 points in a highly volatile session, the 30-share index settled 286.35 points or 0.77 per cent lower at 36,690.50. It hit an intra-day low of 36,610.57 and a high of 37,104.79.
The broader NSE Nifty also fell 92.75 points or 0.85 per cent to 10,855.50. During the day, it hit a low of 10,835.90 and a high of 10,975.65.
Earlier in the day, the Reserve Bank of India (RBI) cut interest rate by an unusual 35 basis points to a nine-year low in an attempt to boost an economy growing at its slowest pace in nearly five years. This is the fourth successive rate cut by the central bank.
The RBI also reduced its growth projection for the Indian economy to 6.9 per cent for the current financial year, from 7 per cent forecast in June, due to a slowdown in demand and investments.
Most rate-sensitive stocks ended on a negative note, with BSE auto, bankex, finance and realty indices cracking up to 2.10 per cent.
Top losers in the Sensex pack included M&M, Tata Steel, Tata Motors, SBI, Vedanta, Axis Bank, ITC, RIL, Maruti, L&T, HDFC twins and Kotak Bank, which fell up to 5.62 per cent.
On the other hand, HUL, Yes Bank, Hero MotoCorp, IndusInd Bank, Sun Pharma, Tech Mahindra and Infosys rose up to 1.95 per cent.
Market volatility spiked after RBI's rate cut decision, which was seen positively. However, lowering of GDP forecast for FY20 and global slowdown fears left markets wanting, said Narendra Solanki, Head Fundamental Research (Investment Services) - AVP Equity Research, Anand Rathi Shares & Stock Brokers.
Elsewhere in Asia, Shanghai Composite Index, Kospi and Nikkei ended in the red, while Hang Seng settled a tad higher. Equities in Europe were trading on a positive note in their respective early sessions.
Meanwhile, the Indian rupee depreciated 2 paise to 70.84 against the US dollar intra-day.
Brent crude futures, the global oil benchmark, slipped 0.54 per cent to USD 58.62 per barrel.