War drums beat down India, Pak bourses
Mumbai: Rising Indo-Pak border tensions shaved off 51 points from the BSE Sensex and 132.75 points, or 7.4 per cent, from the Karachi Stock Exchange. The fall in the Karachi index was the largest fall in a single day since June 1998. It closed at a four-month low of 1,651.26 after the bourse reported a late adjustment. This was after market regulators fixed a downside limit of 7.5 per cent for suspending trading in a particular stock. Meanwhile, the Sensex lost ground for the fifth successive day, with software and pharma stocks being the worst hit. But select PSU stocks gained on hopes of an accelerated divestment programme following the successful completion of the IPCL stake sale. The Sensex closed at 3,282.81, down 50.95 points from Fridays close. On the National Stock Exchange, the S&P CNX Nifty closed down 16.30 points at 1,074.35 points.
Back to News Review index page  

RBI advances CRR cut
Mumbai: Reacting to the sharp rise in gilt yields, the Reserve Bank of India (RBI) has advanced the effective date of reduction in cash reserve ratio (CRR) requirement for banks by a fortnight, to June 1 from June 15. The CRR cut will release Rs 6,000 crore into the system. The move is expected to prop up the government securities market, which has been hit hard by escalating Indo-Pak border tensions and a perceived lack of direction by the RBI on the interest rate front. An RBI release said banks would have to maintain a CRR of 5 per cent with effect from the fortnight beginning June 1, as against the present level of 5.5 per cent.
Back to News Review index page