Mumbai, Jan 25 (PTI) Although in line with the marketexpectations, RBI''s hike in key rates coupled with concernsover rising inflation and higher current account deficit (CAD)pulled down the BSE benchmark Sensex today by about 182 pointsto below the 19K-mark, at 18,969.45.
RBI also revised upwards the inflation target to 7 percent by the end of the current fiscal in March, fanning fearsof further hike in interest rates to tame inflation.Interest-rate related stocks like banking, Realty andAuto stocks, besides FMCG, were the among the worst hit.
Initially, the market absorbed the hike in RBI''s short-term lending (repo) and borrowing (reverse repo) rates by 25basis points each, to 6.50 per cent and 5.50 per cent, in itsthird quarter review of monetary policy, which was in linewith the market expectations.
However, concerns shown by the central bank GovernorDuvvuri Subbarao over the spillover of food inflation togeneral inflation, rising global crude oil prices and high CADof 3.5 per cent of the GDP this fiscal, weighted down themarket. Also, concerns over difference between bank depositsand the credit growth added to the selling sentiment.
The Bombay Stock Exchange 30-share bellwether indexinitially touched a high of 19,340.99, but fell backsharply on selling in the interest-rate related stocks to endat 18,969.45 -- a fall of 181.83 points or 0.95 per cent.
Yesterday, it ended up by 143.75 points or 0.76 per cent.
Similarly, the 50-issue Nifty of the National StockExchange also dropped by 55.85 points or 0.97 per cent to5,687.40. .