Sensex, Nifty drop over 2% at close

The Sensex ended sharply lower weighed by realty, metal, banking and consumer durables stocks. Broader markets also added fuel to the sentiment. After opening bearish, with a loss of 41.41 points, at 16,699.09 on Tuesday tracking negative global cues, the index traded lower and bit recovered after RBI announcement. However in the latter part of the day, the benchmark index plunged further on intense selling seen across board in line with international markets. Further it slumped over 400 points after hitting a low of 16,311.50 at close.

BSE Midcap and Smallcap index plunged 3.69% and 4.42% respectively.

As expected the Reserve Bank of India (RBI) left key rates unchanged in its second quarter monetary policy review today. The repo rate has been kept unchanged at 4.75%. The reverse repo rate left steady at 3.25%.

The bank rate has been retained unchanged at 6.0%. The cash reserve ratio (CRR) of scheduled banks has been retained unchanged at 5% of their net demand and time liabilities (NDTL).

Statutory liquidity ratio (SLR) for scheduled commercial banks has been hiked by 100 basis points to 25% of their NDTL with effect from the fortnight beginning Nov. 7, 2009.

The finance ministry had expressed hope that the RBI in its monetary policy review on October 27 will continue the current soft policy stance.

European stocks advanced as earnings from BP and Vestas Wind Systems topped analysts` estimates. UK`s benchmark index FTSE 100 gained 21.23 points, or 0.41%, to trade at 5,212.97. French benchmark index CAC 40 rose 13.56 points or 0.36% to trade at 3,758.01. Germany`s benchmark index DAX increased 17.54 points or 0.31% to trade at 5,659.70 (4.30 p.m.)

Asian stocks declined, dragging the MSCI Asia Pacific Index down by the most in three weeks, as raw- material prices fell yesterday and Hong Kong enacted measures to curtail property speculation. Japanese benchmark index Nikkei fell 150.16 points, or 1.45%, to end at 10,212.46. Hong Kong`s Hang Seng index declined 420.14 points, or 1.86%, to close at 22,169.59. China`s Shanghai Composite lost 88.11 points, or 2.83% to settle at 3,021.46.

The Sensex ended the day with a loss of 387.10 points, or 2.31% at 16,353.40 after touching a high of 16,699.09 and a low of 16,311.50. The broad-based NSE Nifty fell 124.20 points, or 2.50% at 4,846.70 after hitting a high of 4,970.55 and a low of 4,829.50.

Major gainers in the 30-share index were Wipro (2.18%), Tata Motors (1.56%), Hindustan Unilever (0.86%), Grasim Industries (0.78%), Sun Pharmaceutical Industries (0.35%), and Bharat Heavy Electricals (0.09%).

On the other hand, Hindalco Industries (7.92%), Reliance Capital (7.79%), Tata Steel (7.26%), Bharti Airtel (7.08%), Reliance Communications (6.61%), and DLF (6.58%) were the major losers in the Sensex.

Overall market breadth was extremely negative. Out of the total 2,790 stocks traded at BSE, 442 advanced, 2,281 declined while 67 remained unchanged.

All sectoral indices settled negative. BSE Realty fell 6.24%, Metal dropped 5.82%, Bankex dropped 3.82%, Consumer Durables dropped 3.26%.