New Delhi, India (BBN)-The benchmark BSE Sensex slumped 516 points on Tuesday with bank stocks bearing the brunt as investors ignored a widely anticipated 25 basis points rate cut by the RBI amid a global sell-off.
Stocks declined in Asia and Europe as oil fell and the IMF warned that the global economy was losing momentum, reports The Hindu.
The Sensex lost 2 per cent to close at 24,883.59.
The broader Nifty settled below the 7,700 mark at 7,603.20, down 155.60 points or 2.01 per cent.
This was the biggest single-day fall in nearly two months.
“The rate cut of 25 basis points was on expected lines and largely discounted in the markets,” said Kamlesh Rao, Chief Executive Officer, Kotak Securities.
“Thus, with no positive surprise, markets came off, post the policy announcement.”
However, the measures announced by the central bank will enhance liquidity and that should lead to better transmission of rates over the medium term, which will be a positive from economic growth perspective, he said.
Banking stocks lost the most with the BSE Bankex shedding 592 points or 3.21 per cent – the highest among all sectoral indices.
Heavyweights like ICICI Bank and State Bank of India lost over five per cent each.
Yes Bank, Bank of Baroda and Punjab National Bank lost in the range of 4-5 per cent each.
Jayant Manglik, President – Retail Distribution, Religare Securities said the RBI rate cut that was in line with market expectations failed to cheer the markets as a result of which profit taking was witnessed across the board with rate-sensitive sectors like banking, auto and realty losing maximum ground.
Global equity declines also weighed on sentiment.
The Nikkei slid 390 points, while the Hang Seng lost 1.57 per cent.
Almost all the European indices were also trading in the red at the time of going to press.
Back in India, the overall negative trend was corroborated by the weak market breadth with the advance-decline ratio of almost 1:2.
On the BSE, 1,664 stocks lost ground as against 857 gainers.
Foreign institutional investors (FIIs) sold shares worth Rs.16,647 crore in the first two months of 2016.
Only Lupin managed to buck the trend with a marginal gain of 0.12 per cent.