Stocks tumble, Re weakens on RBI's concerns, drought fears

In a double whammy, the benchmark BSE Sensex today plunged by 661 points, its biggest fall in nearly a month, and rupee went down by 11 paise as RBI took a cautious stance on economic recovery, while forecast of a deficient monsoon added to the rout.
Total investor wealth fell sharply by Rs 2.26 lakh crore today with Sensex falling by 660.61 points or 2.37 per cent to 27,188.38.
The rupee depreciated by 12 paise to end at 63.82 against the American currency tracking steep losses in local equities and good dollar demand from banks and importers.
Gold prices, however, recovered by Rs 45 to Rs 27,270 per 10 grams on jewellers buying in the national capital.

The Reserve Bank reduced interest rate by 0.25 per cent for the third time this year but hinted there may not be any more cuts in the near-term sending stock markets in a tizzy.
Inflation, however, still remains a worry for the bank as it expects price rise to remain subdued till August before rising to 6 per cent by January 2016.

Meanwhile, monsoon is expected to be "deficient" as the Met department today gave "below normal" forecast for rains in the country which is likely to trigger fears of a drought.
"RBI expects the inflation to tick higher from here owing to higher oil prices, below normal monsoon, and fall in crop output. The rise in input costs may further impact the profitability of the already ailing India Inc," said Hiren Dhakan, Associate Fund manager at Bonanza Portfolio.

Rate sensitive -- realty, banking and auto -- suffered the most as selling remained unabated throughout the day.
Bharti Airtel was the lone gainer among Sensex stocks.
Broad-based NSE Nifty dipped below the 8,300-mark by tanking by 196.95 points or 2.34 per cent to 8,236.45.
Today's fall is the worst since May 6 when the BSE Sensex tumbled by 722.77 points.