Mkts plunge on CRR, repo rates hike

BEARISH MARKET: Both Sensex and Nifty went down in early trade as as RBI raises CRR, repo rates.

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Keywords: Opening, Nifty

New Delhi: On the first trading day of the financial year 2007-08, the markets opened in deep red on account of recent monetary tightening from RBI in the form of CRR and Repo rate hike to tame inflation.

The Bombay Stock Exchange benchmark Sensex on Monday plunged nearly 365 points in early trade as stocks led by banking sector nose-dived on nervous selling by funds after the Reserve Bank announced a slew of tightening measures.

The BSE-30 share Sensex, which had gained over 92 points in the last trading session, crashed by 365.18 points, or 2.70 per cent, at 12,706.92 within minutes of opening of the trading.

Similarly, on the wide-based National Stock Exchange, Nifty lost 109.60 points, or 2.46 per cent at 3,711.95.

Stockbrokers said raising of short-term lending rates by 25 basis points to 7.75 per cent and also hike in Cash Reserve Ratio by half a percentage points to 6.5 per cent by the RBI, triggered the major sell-off.

Banking sector stocks were hit the hardest as the segment index fell by over 393 points or 6 per cent at 6,149 points.

All the BSE-30 and NSE-50 stocks were in the negative zone with sizable losses.

However, cues from Asian markets are positive as they were trading firm with moderate gains.

Asian stocks, however, were mostly higher on Monday, with Japan's Nikkei average advancing on gains in Honda Motor Co as investors shrugged off a survey that showed sentiment among Japanese companies weakened for the first time in a year.

Hong Kong's Heng Seng advanced 0.71 per cent or 139.93 points at 19,940.86, Japan's Nikkei gained 0.52 per cent or 89.52 points at 17,377.17, Taiwan's Taiwan Weighted rose 0.47 per cent or 37.42 points at, 921.83, Singapore's Straits Times surged 0.76 per cent or 24.61 points at 3,255.85 and South Korea's Seoul Composite was up 0.73 per cent or 10.59 points at 1,463.14.