Renewed selling was attributed to weakness in European markets due to the on-going crisis at Northern Rock. US Fed is expected to lower interest rates in its meeting on Tuesday but investors adopted cautious approach as the market has already discounted a rate cut by 25 basis points, market players said. The market, however, is likely to get a boost if interest rates are lowered by 50 basis points. After an initial rally to the intra-day high of 15,726.06 the Bombay Stock Exchange (BSE) 30-share Sensitive Index (Sensex) later moved downwards to end at 15,504.43, a net loss of 0.64 per cent from Friday’s close of 15,603.80.
The broad-based S&P CNX Nifty of the National Stock Exchange (NSE) dropped by 23.35 points or 0.52 per cent to 4,494.65 from previous close of 4,518.00. The market is backed by strong economic fundamentals and low inflation according to analysts.