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Taking positive cues from Reserve Bank's cutting CRR rate by 50 basis points on Monday, the BSE barometer commenced the day higher by a handsome over 379 points and had regained the 12,000 level, which it lost on Monday on massive selling for the first time in two years.
However funds continued their selling, pulling down the key index to 11,695.24, a loss of 106.46 points. With selling continuing unabated, the Sensex even dipped to the low of 11,501.85 points during the day.
As the market experienced choppy trade throughout the day, the wide-based National Stock Exchange index Nifty moved between 3,732.65 and 3,537.00 points before ending at 3,606.60, a marginal gain of 4.25 points.
Trading activity was mixed as initial gains were on the back of the RBI cutting cash Reserve ratio, which would infuse Rs 20,000 crore into the liquidity. But reports of melting global stock markets quickly reversed the trend.
Stocks in Europe and Asia declined on concerns that financial firms may need more capital than USD 700 billion, announced in the bailout package by the US. The downtrend overshadowed the speculation that central banks around the world may reduce interest rates.
The MSCI Asia Pacific Index fell one per cent, while the MSCI Emerging Markets Index lost 0.5 per cent. Futures on the Standard & Poor's 500 Index retreated less than 0.1 per cent.
The U.S. Dow Jones Industrial Average index dip below 10,000 points level, first time in four years and Japan's Nikkie to 5 years low as investors turned panic sellers.
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Let us uinderstand one thing that is very clear. Neither RBI is concerned about the ordinary citizens nor SEBI is interested in the ordinary investors though they may talk a lot about the same for political purposes. The banks are charging 42 percent interest on the credit card and 36 percent on the personal loans. Has RBI even bliked an eyelid on these aspects. All these loans and credit cards will become NPAs in time to come. Indian Nifty will fall to 3000 levels. The growth rate of India will come down to 5% if not lower. The RBI has to take immediate steps to bring down the interest rate regime. Otherwise India is doomed. We have economist at RBI who are so bookish that they do not know anything about the real economy. Chidambaram is a lawyer and not an economist. He goes by the economists of RBI, who are half baked. India is facing a very big crisis because of the policiies of RBI and somebody has to realise the reality. Interest rates have to be brought down to the common man.