The Sensex at the BSE fell by 206 points or 1.2 per cent on Thursday to close at a seven week low of 16,639 on the back of weak monsoon,FII outflow and growing concerns that RBI may keep the rates unchanged.
The fall in the Sensex over the last five trading sessions now stands at 639 points or 3.7 per cent. The broader Nifty at the National Stock Exchange fell by 66 points or 1.3 per cent to close at 5,043 on Thursday.
According to the data available at the NSE,foreign institutional investors (FIIs) stood as net sellers in the market,with the outflow reaching Rs 1,180 during the day.
The Reserve Bank of India will review the first quarter monetary policy statement on Tuesday,July 31,2012 and with RBI governor already stating that the inflation continues to remain above the threshold,the market is not very optimistic about a rate cut.
The fall was primarily driven by interest-rate sensitive sectors such as realty,capital goods and banking that fell the most. The BSE Realty index was the biggest loser falling 3.1 per cent during the day.
Among the Sensex companies,Tata Motors fell the most losing 3.8 per cent during the day. Wipro,SBI and Sterlite lost 2.6 per cent each.
Market observers feel that the trend would continue a while longer. There was heavy selling in mid-cap and small cap stocks,and the trend may continue for some more time, said Alex Mathews,head of research at Geojit BNP Paribas