Why Sensex fell over 1,500 points post RBI rate cut today

Sensex erased all its gains in early trade today after RBI announced repo rate cut of 75 basis points and announced liquidity boosting measure of Rs 3.74 lakh crore for the financial system hit by impact of coronavirus outbreak. Sensex which traded at 30,886 before the RBI announced its emergency rate cut fell to a low of 29,360 post the apex bank's policy.

The index which lost 1,526 points after the policy announcement had surged 1,180 points in early trade compared to its previous close of 29,946.

The crash in Sensex was unexpected.

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Amit Gupta, Co-Founder and CEO, TradingBells said, "It is a very good policy to cheer the market but the problem is that the market has already rallied too much from lower levels ahead of policy. Real trend decider for the market will be direction of new cases of Covid-19 globally and locally."

Sensex has gained 5,145 points till date intra day since it logged its biggest ever loss of 3,934 points on Monday. Nifty too has managed a 1,428-point recovery till date after suffering a massive loss of 1,135 points on Monday.