Sensex cracks 1000 points, Reason for the fall

The BSE Sensex plunged over 1000 points and CNX Nifty declined over 300 points in 2 session after RBI policy.Let me put the reason from both Technical and Fundamental Perceptive

1. Fundamental

 

• RBI pause on further rate cuts:

On expected lines, the Reserve Bank of India slashed repo rate by 25 bps, but a cautious stance for the rest of the year weighed on sentiment.The RBI has cautioned on inflation increasing due to the sub-normal monsoon, which can push the inflation rate to 6 per cent by January 2016, which is also the target set earlier for monetary policy.This indicated that the RBI will take further action based on inflationary developments. The CPI inflation will remain benign for the next few months before showing an increasing trend.

 

• Monsoon forecast stokes fears of drought

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