A day ahead of Reserve Bank monetary policy meet, Indian shares on Monday hit over two-week lows in late sell-off with the benchmark BSE Sensex tumbling 247 points and the NSE Nifty slipping below the 7,800-mark amid weakness in European markets and mixed Asian cues.
RBI governor Raghuram is widely expected to announce this year’s fourth rate cut on Tuesday and expectations for the same have further increased after the US Fed’s status quo.
Expectations are also fuelled by retail inflation dropping to 3.66% in August and economy expanding at a slower pace of 7% during the same month.
Vinod Nair head-fundamental research at Geojit BNP Paribas Financial Services said, “We are in a wait-and-watch scenario ahead the RBI policy meet. We believe that the market has already considered a rate cut of 25 basis points.”
Investors, meanwhile, were spooked by Europe, where shares were in deep red after mining major Glencore slumped to a record low on depressed commodity prices. Consequently, the BSE metal index fell by more than 2.50%.
Besides, auto shares tumbled 1.74%. Moreover, mixed Asian markets after profits at China’s major industrial companies saw their biggest declines in four years last month added to the subdued mood. After opening higher at 25,922.71, the BSE Sensex advanced to a high of 25,936.89 largely as investors expanded positions following beginning of October series.
However, the barometer succumbed to profit-booking and slipped to a low of 25,593.56 before ending at 25,616.84, a loss of 246.66 points or 0.95%.
This is index’s weakest closing level since September 11 at 25,610.21. On similar lines, the 50-share NSE Nifty dipped below the crucial 7,800-mark and settled down 72.80 points or 0.93% at 7,795.70.
It shuttled between 7,893.95 and 7,787.95. Meanwhile, a data showed that foreign investors sold shares worth Rs 115.10 crore on Thursday. Markets remained closed on Friday for Eid.