Indian equity indices tank ahead of monetary policy update

Ahead of the monetary policy update for this fiscal, wherein expectations are high over an interest rate cut, key Indian equity indices opened sharply lower on Tuesday as sentiments continued to be ruled by the weak global cues, notably in other Asian markets.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened at 25,496.38 points against the previous day's close at 25,616.84 points. Minutes thereafter, it was quoting at 25,357.09 points, with a loss of 259.75 points, or 1.01 percent.

At the National Stock Exchange (NSE), the broader Nifty was ruling at 7,717.75 points with a loss of 77.95 points, or 1.0 percent. Both the Sensex and the Nifty had tanked nearly 0.95 percent each on Monday.

The markets were keenly awaiting Reserve Bank of India Governor Raghuram Rajan to announce the monetary policy update at 11 a.m., with a decent cut in interest rates, and give a feel about what the central bank thinks about the state of the global Indian economy.

"The central bank is expected to cut its key repo rate by at least 25 basis points but investors' focus would be on the tone of the central bank at a time when both the whole sale price index and retail inflation are falling," Angel Broking said in a pre-market analysis.

Key Asian indices were also ruling at 42-month lows due to sharp falls in Wall Street and European markets.

"The US markets ended in negative (on Monday) led by weak economic cues out of China which once again raised concerns about the health of the global economy," Angel Broking said. "China's industrial profits declined in August as product prices continued to decrease."