GAAR relief short-lived; Sensex crashes to 4-month low

The Sensex fell to a low of 16,502.91 in the morning before and continued in trade in negative zone for most of session and ended at 16,546.18, a steep fall of 366.53 points or 2.17 per cent. Sensex's market value dropped by over Rs 53,000 crore today. ITC, TCS, HDFC Bank, Tata Motors and L&T contributed to a loss of 205 points in the blue-chip index.

Brokers said one of the main reasons for today's fall was RBI Deputy Governor Subir Gokarn's comment in Hyderabad that there is little room for reduction in interest rates in view of inflationary pressures. Bank stocks in Sensex such as SBI, HDFC Bank and ICICI Bank fell between 2-3.3 per cent.

"Comments from RBI