The euphoria generated by the RBI repo rate cut did not last even a full day with the Sensex tanking by more than 210 points today.
The S&P BSE Sensex plunged 213 points or 0.72 per cent at 29,380.73 and the CNX Nifty shed 73.6 points or 0.82 per cent at 8,922.65.
The six Sensex stocks which closed in the green were the pharma major Sun Pharma which reached a new 52-week high topping Rs. 1,000 in value, Bajaj Auto, ITC, Bharti Airtel, HDFC and Tata Motors.
All 24 other Sensex stocks closed in the red. Among the biggest losers were Axis Bank, SBI and M&M.
Even stocks in the IT sector that are not generally influenced by interest rate movements were down with TCS, Wipro and Infosys closing with losses.
Major Sensex gainers were Sun Pharma 6.62%, ITC 0.89%, Bharti Airtel 0.63%, Bajaj Auto 0.28% and HDFC 0.08%, while the top five losers were SSLT 4.11%, Hindalco 3.32%, Tata Power 3.21%, Axis Bank 3.19% and SBIN 2.82%.
Barring healthcare, FMCG and realty, all other BSE sectoral indices ended in the red. Among them, metal index fell the most by 2.42 per cent, followed by banking 1.77 per cent, PSU 1.75 per cent and oil & gas 1.33 per cent, while healthcare index was up 1.25 per cent, FMCG 0.9 per cent and realty 0.02 per cent.
The markets opened with a bang this morning after the RBI Governor Raghuram Rajan sprang a surprise by announcing a 0.25 per cent cut in repo rate.
The 30-share index crossed the 30,000-mark by surging 431.01 points or 1.45 per cent to trade at an all-time high of 30,024.74.
Similarly, the National Stock Exchange index Nifty breached the 9,100-mark for the first time by climbing 122.95 points or 1.36 per cent to 9,119.20.
Raghuram G Rajan, Governor, RBI , in a statement said: "The need to act outside the policy review cycle is prompted by two factors: First, while the next bi-monthly policy statement will be issued on April 7, 2015 the still weak state of certain sectors of the economy as well as the global trend towards easing suggests that any policy action should be anticipatory once sufficient data support the policy stance. Second, with the release of the agreement on the monetary policy framework, it is appropriate for the Reserve Bank to offer guidance on how it will implement the mandate.
Going forward, the RBI will seek to bring the inflation rate to the mid-point of the band of 4 +/- 2 per cent provided for in the agreement, i.e., to 4 per cent by the end of a two year period starting fiscal year 2016-17."
But the momentum did not last for long with concerns over corporate performance and the weakness shown by European markets unnerving investors.
Global equities pulled back from recent record highs on Wednesday, with investors turning cautious after underwhelming euro zone PMI data and ahead of central bank meetings.