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Bloodbath On Markets Once Again As RBI Maintains Status Quo

(RTTNews) - Indian shares nosedived once again to hit six-month lows on Friday and the rupee breached the 74-mark against the dollar for the first time ever, after the Reserve Bank of India kept its repo rate unchanged at 6.5 percent, surprising may who had expected a 25-bps rate hike to defend the falling rupee.

Investors were also disappointed by the RBI's narrow focus on inflation at a time when U.S. yields are inching up and oil prices are surging toward $100 a barrel on concerns stemming from the upcoming U.S. sanctions on Iran.

The central bank forecast 4 percent inflation for the second quarter of fiscal year 2018-19, 3.9-4.5 percent in the second half and 4.8 percent in the first quarter of 2019-20, with risks somewhat to the upside.

GDP growth projection for 2018-19 was retained at 7.4 percent, with risks broadly balanced.

The benchmark 30-share BSE Sensex settled the day down 792.17 points or 2.25 percent at 34,376.99, while the broader NSE Nifty index slumped 282.80 points or 2.67 percent to 10,316.45.

The Sensex and Nifty lost around 6 percent over the past three sessions on concerns about higher oil prices, the weakening rupee and the crisis at IL&FS.

State-owned oil marketing companies BPCL, HPCL and IOC fell between 16 percent and 25 percent to hit multi-year lows on concerns that the country is going back toward the regulated regime.

ONGC lost 14.7 percent, GAIL gave up more than 10 percent and market heavyweight Reliance Industries declined 6.5 percent.
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