Ahead of RBI policy, Sensex tumbles over 300 pts on cues from US, Asia

Tracking the sell-off in overseas markets that saw US gauges tumbling 2-3 percent on Monday, domestic shares followed suit as investors turned risk-averse leading to the benchmark Sensex dropping more than 300 points amid hectic selling across the sectors. Amid fresh concerns of a possible US rate hike by December and lingering woes due to sliding Chinese economy, local traders continued to exit from risky sectors such as metals, oil & power even as a possible rate cut by the RBI later today failed to lift sentiment in banking, realty and auto shares. [caption id=“attachment_2448586” align=“alignleft” width=“380”]  Reuters[/caption] At 10 am, the 30-share BSE S&P Sensex was at 25,370.55, down 246.29 points, or 1 percent, after sliding to a low of 25,307.94, down 309 points. The broader 50-stock CNX Nifty dropped 77.35 points, or 1 percent, at 7,718.35. Market breadth stood extremely bearish with 1,104 stocks declining against just 430 advances on the BSE. Other Asian indices such as China’s Hang Seng tumbled 3.5 percent and Shanghai Composite fell 1.8 percent while Japan’s Nikkei dropped 2.8 percent in early trade amid global economic woes. “The global investors are back to being cautious with worries related to China and overall growth of the global economy. In such a scenario all eyes are turned towards the RBI. Expectations are for a rate cut in the policy meet scheduled to be held today. These expectations were visible in the run up seen in the rate sensitive sectors in the previous trading session,” said Nitasha Shankar, Vice President - Research, YES Securities. According to Shankar, immediate resistance for the Nifty is at 7930 and a trade above the level of 7930 may take the index to levels of 8030-8090. On the downside immediate support is placed at 7800 and a trade below 7800 could drag it down to levels of 7760-7720. Among the laggards in the Sensex space, shares of Vedanta tumbled 4.3 percent to Rs 87.25, ICICI Bank fell 3.1 percent to Rs 260.20, Axis Bank shed 2.8 percent to Rs 492.50, Bharti Airtel faltered 2.7 percent to Rs 318.40, Hindalco declined 2.5 percent to Rs 68.90 and Tata Steel was down 2.3 percent at Rs 204.60. Others losers such as Gail, Dr Reddy’s, Lupin, Bajaj Auto, Cipla, NTPC, Sun Pharma, HDFC Bank, HDFC and Hindustan Unilever were down 1-2 percent.