Measures announced by the RBI to boost the economy and arrest the rupee fall failed to enthuse the stock market, with the Sensex losing about 90 points at the end of the trading session on Monday.

The 30-share BSE index Sensex was down 90.35 points or 0.53 per cent at 16,882.16 and the 50-share NSE index was down 31.4 points or 0.61 per cent at 5,114.65.

The first two announcements forming part of a slew of reforms appear to have disappointed the stock market and the forex market with the rupee also depreciating after the announcements started trickling in.

It has been said that the ECB limit for new projects has been hiked by $10 billion and the FII limit on Government bonds has been hiked to $20 billion.

The market, which was getting restive with the delay in the announcement, slowly began shedding the gains it had made in anticipation of some positive steps around 2.30 pm.

It was true that the announcements made so far do not indicate the trend of the rest of the measures to be announced.

But the BSE Sensex, that had gained more than 100 points in the morning to trade above 17,000, dipped below the magic number by 2.45 pm and has lost about 70 points to hover around 16,900 levels.

Similarly, the broad-based NSE Nifty lost about 20 points to trade at 5,120 levels.

Though the bonds were announced to attract foreign investments that would shore up the INR, the rupee in fact lost ground. Before the announcements were made, the INR was quoting at Rs 56.56/dollar but rapidly shed value to go up to Rs 56.90/per dollar.

The sliding rupee saw to it that the Nifty and the Sensex wiped off all their intra-day gains on Monday.

Marketmen were disappointed with the RBI’s measures as many were expecting a hike in the FII investment limit in corporate bonds from the existing level of $20 billion.

“We believe, the hike in Government debt is welcome as it improves the inflows of dollar on a short-term basis. However, the rest of the other measures would require a longer time frame to play out. Hence, the near-term direction for the dollar/rupee remains upward. The market is going to keep a close eye on the upcoming EU economic summit, where, if the European leaders fail to take concrete steps, then it could push the dollar/rupee towards 58.00/58.40 on spot," said Mr Anindya Banerjee, Senior Manager, Currency Derivatives.

Volatility was high and the India Vix ended Monday up five per cent at 21.57.

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