Sensex down 540 points

The Sensex tumbles by over 540 points at mid-session on aggressive selling by funds and general investors, after the RBI hiked key interest rate.

Sensex tumbled by over 540 points at mid-session on Tuesday on aggressive selling by funds and general investors, after the Reserve Bank hiked key interest rate in its quarterly review of the monetary policy.

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The Sensex, which commenced the day lower by 321 points, rolled down further to record a loss of 540.19 points at 1230 hrs as heavy-weight stocks led by Reliance Industries, ONGC, Infosys Technologies, ICICI Bank and HDFC Bank fell sharply.

The Reserve Bank on Tuesday hiked the key short-term inter-bank lending rate and mandatory cash reserve requirement by 0.50 per cent and 0.25 per cent respectively, a move that could increase interest rates for personal and commercial credit.

Traders said melting global stock markets was another dampening factor for the markets.