The BSE Sensex and the Nifty fell over 2 per cent on Friday, marking
their biggest single day percentage fall since March 2012 as lenders
such as ICICI Bank reeled after economic growth data came in line with
expectations, dashing hopes the RBI would cut interest rates next month.
Reserve Bank of India Governor Duvvuri Subbarao's comments on Thursday that retail inflation is still high, and several upside risks to inflation remain were also seen adding to an already cautious mood.
The Sensex closed at 19,760, down 455 points or 2.25 per cent, while the Nifty declined 138 points to end at 5,986. The rupee hit an 11-month low and traded at 56.73 to the dollar.
"This was inevitable. More cuts are likely. The market is not in a strong bull run. Levels of 5,820-5,800 are possible on the Nifty," Shardul Kulkarni of Angel Broking said.
Rate sensitive stocks saw strong selling pressure, led by the Bank Nifty, which fell 2.6 per cent. Index heavyweights - ITC and Reliance - closed with deep cuts weighing on markets.
Among banking stocks, PSU lenders such as Bank of Baroda and Punjab National Bank were the top losers.
In-line GDP data for the March quarter failed to lift sentiments on the Street. India's economy grew 5 per cent in 2012-13, its lowest rate in a decade.
Gross Domestic Product grew at 4.8 per cent in the quarter ending March 31. The manufacturing sector grew an annual 2.6 per cent during the quarter while farm output rose just 1.4 per cent.
European shares traded with deep cuts though Japan's Nikkei bounced 1.7 per cent at the end of its worst week in over a year.
(With inputs from Reuters)
Reserve Bank of India Governor Duvvuri Subbarao's comments on Thursday that retail inflation is still high, and several upside risks to inflation remain were also seen adding to an already cautious mood.
The Sensex closed at 19,760, down 455 points or 2.25 per cent, while the Nifty declined 138 points to end at 5,986. The rupee hit an 11-month low and traded at 56.73 to the dollar.
"This was inevitable. More cuts are likely. The market is not in a strong bull run. Levels of 5,820-5,800 are possible on the Nifty," Shardul Kulkarni of Angel Broking said.
Rate sensitive stocks saw strong selling pressure, led by the Bank Nifty, which fell 2.6 per cent. Index heavyweights - ITC and Reliance - closed with deep cuts weighing on markets.
Among banking stocks, PSU lenders such as Bank of Baroda and Punjab National Bank were the top losers.
In-line GDP data for the March quarter failed to lift sentiments on the Street. India's economy grew 5 per cent in 2012-13, its lowest rate in a decade.
Gross Domestic Product grew at 4.8 per cent in the quarter ending March 31. The manufacturing sector grew an annual 2.6 per cent during the quarter while farm output rose just 1.4 per cent.
European shares traded with deep cuts though Japan's Nikkei bounced 1.7 per cent at the end of its worst week in over a year.
(With inputs from Reuters)
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