RBI Governor D Subbarao in Q1 monetary policy review on Tuesday expectedly kept key policy rates unchanged, but markets were jittery as the central bank lowered the economic growth (GDP) projection for the current fiscal to 5.5 per cent from 5.7 per cent.
Selling pressure continued even after the government announced plans for further liberalisation. Finance Minister P Chidambaram said the FDI policy would be liberalised further and public sector undertakings would be encouraged to raise funds from overseas.
RBI's lower GDP forecast and rupee again falling below the sensitive 61-mark spooked stocks markets with S&P BSE benchmark Sensex plunging by 584 points or 2.96 per cent to nearly one-month low of 19,164.02.
Sensex resumed lower at 19,714.42 and dropped further to a low of 19,078.72 before concluding at 19,164.02. It has dropped by 985.83 points or 4.89 per cent in two weeks.
The NSE 50-share Nifty also dropped by 208.30 points or 3.54 per cent to 5,677.90. It has also tumbled by 351.30 points or 5.83 per cent in last two weeks.