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Sensex Falls Around 300 Points; Rupee Down 20 Ps

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The BSE Sensex fell more than 1 per cent, heading for a second consecutive day of declines, after RBI Governor Raghuram Rajan surprised markets in his maiden policy review on Friday by raising interest rates to ward off rising inflation.

The BSE Sensex was trading down more than 200 points while the broader Nifty fell over 70 points at 10.28 a.m.

The RBI may raise policy rates again after shocking markets by increasing them in only his first meeting, signalling Rajan is willing to risk prolonging what is already the lowest economic growth in years in order to quash persistent inflation.

The NSE bank falls 3.7 per cent, adding to Friday's 4.1 per cent slump. ICICI Bank falls 3.9 per cent while State Bank of India is down 3.95 per cent.

However, Titan Company gains 0.9 per cent as India will start buying gold again after a two-month gap as the government and banks have agreed how new rules on imports should work, dealers say.

Rupee Down 20 Paise In Early Trade
The Indian rupee fell by 20 paise to 62.43 against the dollar in early trade Monday, 23 September, at the Interbank Foreign Exchange market on demand from importers for the US currency amid a lower opening in the domestic market.

Forex dealers said besides fresh demand for the American currency from importers, a hike of 25 basis points in key lending rates by the Reserve Bank of India (RBI) on Friday, 20 September, and a lower opening in the equity market mainly put pressure on the rupee but dollar's weakness against other currencies overseas, limited the fall.

The rupee had lost 46 paise to 62.23 against the dollar in the previous session after a surprise rate hike by the Reserve Bank of India.

(Agencies)


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