Mumbai: Indian shares extended losses to more than 3% on Thursday afternoon, falling to their lowest in more than four months, as economic worries remained even after a half percentage point rate cut.
Reliance Industries, India’s largest listed firm, led the losers.
By 2:17pm, the 30-share BSE index was down 3.26% at 8,171.24, with 27 components losing, after hitting 8,170.20, its lowest since 27 October last year. The 50-share NSE index was down 2.85% at 2,569.85.
Shortly after a positive opening, key indices were surrounded by pessimistic bias as cut in interest rates by RBI failed to erase economic worries.
The Reserve Bank of India after the market hours on Wednesday lowered the repo rate to 5% from 5.5%and reverse repo rate to 3.5% from 4% effective immediately. But analysts had predicted that markets would hardly benefit from the cuts unless bank lowered lending rates.
Positive sentiments from global markets did reflect on the day’s opening. Wall Street rebounded in Wednesday’s trade on hopes of Chinese stimulus and Asian markets were trading firm after Chinese Prime Minister Wen Jiabao promised more fiscal expenditure to boost the economy.
By 11:51am, the 30-share BSE index was down 2.3%, lowest since 27 October last year, but later recovered some losses as inflation data was announced at 3.03%, a drop from previous week’s 3.36%. At 12:46pm, the Sensex was 162.91 points down at 8,283.58 and the 50-share NSE Nifty index was down 43.60 points at 2,601.60.