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BSE Sensex tumbles 383 points after RBI hikes repo rate

The central bank, against expectations, hiked repo rate by 25 basis points to 7.5 per cent. It left the cash reserve ratio unchanged at 4 per cent.

BT Online Bureau   Mumbai     Last Updated: September 20, 2013  | 17:06 IST
Sensex tumbles 383 points after RBI hikes repo rate

The BSE Sensex slumped the most in almost three weeks, closing down 383 points, after the Reserve Bank of India (RBI) unexpectedly hiked the repo rate to check inflation.

Governor Raghuram Rajan, in his maiden policy review, unexpectedly hiked the short-term lending rate by 25 basis points to 7.5 per cent with immediate effect in a bid to control inflation.

The 30-share index of the Bombay Stock Exchange fell as much as 595.21 points before ending 382.93 points lower, or 1.85 per cent, to 20,263.71. It was the biggest drop since a 651-point decline on September 3.

The index had on Thursday surged 684 points to an almost three-year high after the US Federal Reserve left its stimulus programme unchanged.

The 50-share Nifty plunged 103.45 points, or 1.69 per cent, to 6,012.10.

Also, MCX-SX's 40-share index ended at 12026.41, down 205.69 points.

On the 30-share Sensex, 21 stocks declined, led by ICICI Bank and HDFC Bank, which together contributed more than 120 points to the index's fall.

Interest-sensitive sectors such as realty and banking were the major losers as a higher cost of credit would hamper their business and reduce revenue.

The realty sector index dropped the most, losing 6.53 per cent, followed by the banking index 4.18 per cent, the capital goods index 3.04 per cent and the auto index 1.58 per cent.

The forex market also reacted negatively and the rupee depreciated 85 paise to 62.62 to the dollar intra-day.

With inputs from PTI

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