Meanwhile, the broader markets too got butchered amid the brutal bloodbath across counters and traded with massive losses, larger than their larger peers. The bourses got annihilated on extremely large volumes of over Rs 1.26 lakh core while the market breadth on BSE was dominantly in favor of declines in the ratio of 235:2521 while 47 scrips remained unchanged.
The BSE Sensex is currently trading at 17,065.28 down by 627.90 points or 3.55% after trading as high as 17,358.18 and as low as 16,990.91. There were no stocks advancing against 30 declines on the index.
The broader indices were trading on a pessimistic note; the BSE Mid cap index plummeted 4.10% and Small cap plunged 4.87% respectively.
On the BSE sectoral space there were no gainers while IT down 5.57%, CD down 5.37%, Realty down 5.31%, TECk down 4.99% and Metal down 4.85% were the major losers on the index.
There were no gainers on the Sensex, while R Com down by 7.86%, Sterlite down 7.71%, R Infra down 7.13%, JP Associates down 6.29% and Infosys down 6.07% were the major losers on the index.
Meanwhile, the Reserve bank of India's (RBI) Governor D Subbarao admitted that to control inflation it had sacrificed economic growth in the short term, however it has done it to ensure sustainable growth in the long term. RBI expects inflation to be around 4 to 4.5% in the medium term. D Subbarao said, "I believe that there is no new normal to inflation. We can bring it down to 5%, and then further down to 4-4.5% in the medium term.'
Accepting the criticism that on the aggressive monetary policy standing of the central bank in order to control inflation and it is ignoring the slowdown across the sectors of economy, the RBI Governor said, 'Yes. We are sacrificing growth... in the short-term. But it is only to ensure sustainable growth in the medium term.'
'Our experience shows that when inflation is low, may be you can raise it somewhat and get high growth, but up to a threshold level. Beyond that threshold level, if you try to raise growth, by raising inflation, you actually end up with higher inflation and lower growth,' RBI governor added.
The headline inflation measured by the Wholesale Price Index (WPI) has been hovering around the double digit number, despite the RBI's aggressive monetary standing on inflation. Over the past 16 months, RBI has increased its short term lending and borrowing rates by 11 times or 325 (3.25%) basis points. However, RBI's measures have been failed to tackle inflation.
Pointing out limitations of the monetary policy measures to tame inflation, he said, 'With one instrument, that is interest rate, you cannot at the same time restrain consumption and support investment. So, in the short-term you may have to sacrifice growth to generate an environment of rapid growth and steady inflation in the medium term.'
The S&P CNX Nifty is currently trading at 5,140.40, lower by 191.40 points or 3.59% after trading as high as 5,229.65 and as low as 5,116.45. There were 47 stocks advancing against 3 declines on the index.
The top gainers of the Nifty were BPCL up 1.58%, ONGC up by 0.22%, Cipla up 0.02%.
HCL Tech down 7.68%, R Com down 7.47%, Sterlite down 7.42%, R Infra down 6.94% and Seas Goa down 6.47% were the major losers on the index.
Asian markets traded on a somber note, Shanghai Composite plummeted 46.65 points or 1.74% to 2,637.38, Hang Seng got obliterated by 944.83 points or 4.32% to 20,939.91, Jakarta Composite got decimated 158.25 points or 3.84% to 3,963.83, KLSE Composite got annihilated 19.72 points or 1.27% to 1,527.17, Nikkei 225 got lacerated by 324.92 points or 3.36% to 9,334.26, Straits Times got slaughtered by 93.64 points or 3.01% to 3,013.37, Seoul Composite demolished 58.49 points or 2.90% to 1,959.98 and Taiwan Weighted wiped out 362.65 points or 4.36% to 7,954.62.
The European markets have opened on bleak note as France's CAC 40 plummeted 1.24%, Germany's DAX shaved 2.92% and London's FTSE sank 2.91%
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