Sensex falls over 240 points as RBI raises key rates

The Bombay Stock Exchange benchmark Sensex fell by over 240 points, or 1.37 per cent, in the opening trade on Monday, snapping the four-session winning streak as investors sold stocks after the Reserve Bank raised its key short-term lending and borrowing rates.

The 30-share index, which gained nearly 412 points in the past four sessions, fell by 240.85 points to 17,337.38 points in the opening trade with all the sectoral indices trading in the negative.

The wide-based National Stock Exchange index Nifty dipped by 75.75 points, or 1.43 per cent to 5,187.05 points.

Brokers said RBI’s decision to raise key short-term lending and borrowing rates by 25 basis points each as part of its policy to tighten money supply to combat inflation, mainly led to the downfall in markets on Monday.

The repo and the reverse rate (short-term rates at which RBI lends and borrows from banks) were hiked last week to 5 per cent and 3.5 per cent respectively.

Among major losers, Reliance Industries fell by 0.46 per cent to Rs 1,084.75, Infosys Technologies by 0.62 per cent to Rs 2,757.80, DLF Ltd by 1.65 per cent to Rs 307.55, HDFC Ltd by 2.04 per cent to Rs 2,638.15, ICICI Bank by 1.97 per cent to Rs 936.05, Tata Steel by 1 per cent to Rs 637.50 and Sterlite Industries by 1.22 per cent to Rs 815.10.

Bucking the trend, Bharti Airtel stocks traded 1.28 per cent higher at Rs 315.85 after company announced tying up of $8.3 billion debt for the proposed acquisition of Kuwait-based Zain Telecom’s African unit.