Sensex tanks 275 points; cap goods, metals plunge
Pratip Chaudhuri, chairman of the State Bank of India, said reducing the cash reserve ratio (CRR)—the amount of deposits that banks must keep with RBI—to 4% will free up about Rs 7,500 crore.
The selloff on the Street resumed after a brief phase that saw some pullback in the benchmark indices. At 3.10 pm, the Sensex traded at the lowest point of the day, falling 275 points or 1.6% at 17,211. The broader Nifty index was down 90 points to 5,233.
Analysts said the Nifty may fall all the way to 4,500 levels if crucial long term averages were breached.
"A close below 5,155 would mean that all hell would break loose," Hemen Kapadia, CEO, www.chartpundit.com told NDTV Profit.
Fundamentally, investors seem to be unsure about the new tax provisions that have kicked in the new financial year. Uncertainty over the General Anti Avoidance Rule (GAAR) provisions has meant that foreign liquidity that drove Indian equities higher for the better part of this year has started moderating.
Global headwinds weighed on the Street today. Asian markets closed near the day's low. US Futures indicated a negative opening. Last week, the Wall Street closed lower on the back of weak jobs data. European markets are closed today.
All 14-sectoral indices traded lower. Metal (-3.4%) and capital goods stocks (-3.1%) were the biggest underperformers. Banks (-1.9%), power (-2.4%) and PSU stocks (-2%) also contributed to losses.
On the Nifty index, 43 of the 50 stocks traded lower. Aluminium major Hindalco (-5.2%) was the top loser followed by Vedanta Group firm Cairn India (-4.8%). Infra lender IDFC, Infra major Jaiprakash Associates, mining firm Sterlite and Sesa Goa and power equipment maker Bharat Heavy Electricals Ltd traded with 4-5% lower.