Sensex tanks 640 pts as IMD cuts monsoon forecast‏

Mumbai: Extending its decline, the BSE Sensex tanked over 640 points on IMD’s lowering monsoon forecast for this year and RBI taking a cautious stance on the economic recovery even as it cut policy rates by 25 basis points.

In its second bi-monthly policy review, the RBI cut interest rate by 0.25% for the third time this year.

The 30-share index – which fell by over 347 points soon after RBI announced monetary policy – was down sharply by 642.11 points or 2.31% to 27,206.88.

All the sectoral indices led by banking and realty, were trading in negative terrain.

The wide-based National Stock Exchange index Nifty dipped below the crucial 8,300-level by tumbling 177.70 points or 2.11% to trade at 8,255.70.

RBI, meanwhile, left all other policy tools like cash reserve requirement unchanged at 4% and Statutory Liquidity Ratio (SLR) at 21.5%.

RBI governor Raghuram Rajan lowered projections of the economic growth as measured by GVA (gross value added) to 7.6% from 7.8% estimated in April due to global factors and likely impact of below normal monsoon.
 

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