BSE Sensex plunges 350 pts after RBI cuts repo rate, DMK withdraws support to UPA

Erasing early gains, the BSE benchmark Sensex today plunged below the 19,000-level by falling over 350 points in late morning trade even as RBI cut its key policy rate by 0.25 per cent.

The 30-share index, which opened in positive zone, fell by 350.32 points, or 1.82 per cent to trade at 18,942.88 at 1130 hrs after RBI left cash reserve ration (CRR) unchanged at 4 per cent and announced a cut in short-term lending, repo, rate by 0.25 per cent to 7.5 per cent.

All the sectoral indices, led by oil and gas and banking, were trading in negative, with losses of up to 2.47 per cent.

The index touched the day's high of 19,378.61, following interest rate cut announcement, but fell below the 19,000 level to touch a low of 18,942.88 as the RBI kept the cash reserve ratio unchanged at 4 per cent.

On similar lines, the National Stock Exchange Nifty index Nifty fell bellow 5,800 level by declining 100.65 points, or 1.72 per cent, to 5,734.60 points.

The fall was mostly led by interest rate sensitive stocks such as banking after the Reserve Bank did not cut the cash reserve ratio (CRR), brokers said.

They said a cut in CRR would have benefited banks by easing liquidity.

The BSE banking index fell by 1.97 per cent to 13,209.95 as stocks of state-run State Bank of India fell 1.98 per cent to Rs 2,204, ICICI Bank by 1.36 per cent to Rs 1,036.85, HDFC Bank by 2.09 per cent to Rs 630.10 and Axis Bank by 1.78 per cent to Rs 1,301.25.

Indian stocks to watch-March 19

(Reuters): GLOBAL MARKETS ROUND UP

Nifty futures on the Singapore Exchange rose 0.2 percent, while the MSCI-Asia Pacific index, excluding Japan, gained 0.38 percent.

... contd.

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