Indian share prices closed 0.48 percent lower on Tuesday after India's central bank raised borrowing rates for banks and raised concern about rising prices and an overheated economy, dealers said.
They said the market fell after the central bank raised its repurchase rate to 7.25 percent in a mid-term policy review because of concern that companies will have to pay higher interest on borrowing as a result.
The benchmark 30-share Sensitive index closed down 62.36 points to 12,961.9 following the noon statement by the central bank. Before the central bank statement, the Sensex rose to a fresh intraday record of 13,075.85.
Automobile, banking and software stocks led the market lower. "Investors have seen a good run in recent months and some profit booking was expected. The monetary policy was aimed to reign in credit growth and manage inflationary pressures," said R. Balakrishnan, director with Parallex Consultancy Services.
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