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Indian stocks volatile for second day, falling 3 percent

Indian stocks volatile for second day, falling 3 percent

Indian shares tumbled for a second day Tuesday, with investors selling shares of Oil & Natural Gas, State Bank of India and Bharat Heavy Electricals.
The Bombay Stock Exchange's 30-stock Sensitive Index, or Sensex, fell 3 percent or 404 points to close at 12,995.02 points, the first time it dropped below the 13,000 mark for the first time since Nov. 8.
At one point the index fell as much as 582 points, or 4.4 percent, but investors snapped up stocks to lift the market in the final hour of trading.
The drop came after the market tumbled 400 points on Monday in reaction to the central bank's decision to raise banks' cash reserve ratio, which forces banks to keep more reserves and reins in excess cash liquidity in the market.
Tuesday's volatility was across the board and not restricted to the banking sector.
A Mumbai-based independent analyst Rajeev Sampat said investors should be cautious since volatility could continue.
"The market was in an exuberant zone and irrationality saw the markets go up so high," he said. "The market was waiting for a trigger to correct itself and that happened with the bank decision."
India's junior finance minister Pawan Kumar Bansal downplayed the drop.
"Nobody questioned when the Sensex rose to 14,000 levels," Bansal said. "There is no cause for worry if investments are made on informed decisions."
Among the big losers were State Bank of India, which fell 5.1 percent to 1,180 rupees, Oriental Bank of Commerce, down 8.2 percent at 216.05 rupees and Oil & Natural Gas Corp., or ONGC, down 3.6 percent to 806 rupees.
Cement major ACC Ltd. fell 6.2 percent to 972 rupees and Bharat Heavy Electricals Ltd. slid 4.1 percent to 2,429 rupees.


Updated : 2021-10-27 22:08 GMT+08:00