The benchmark stock index Sensex plunged to an over 40-month low on Thursday on brisk selling by funds in blue-chips led by Reliance Industries and ICICI Bank on concerns that the RBI's interest rate cuts may not be enough to revive the slowing economy.
The Bombay Stock Exchange 30-stock Sensex recorded a loss of 248.57 points to 8,197.92, the lowest seen since November 2, 2005. It touched an intra-day low of 8,166.97.
The 50-share National Stock Exchange index Nifty plunged by 68.50 points to 2,576.70, after touching the day's low of 2,564.19 points.
Even as the Reserve Bank of India cut short-term lending and borrowing norms by 50 basis points, the measures failed to lift investor confidence and foreign funds sold on a gloomy outlook for the economy.
The selling pressure remained strong, and inflation declining to 2002 levels at 3.03 per cent could not revive sinking investor confidence.
The market sentiment turned bearish after the market-heaviest and trend-setter Reliance Industries dropped five per cent to Rs 1,149.10 and ICICI Bank, the second-biggest lender, slid 5.17 per cent to Rs 269.60.
