Tackling the global finacial meltdown , RBI yestrday came with the move of cutting repo rate and reverse repo rate by 50 bs points. Currently Repo Rate ( the rate at which RBI lends to commercial banks) stands at 5% and Reverse Repo rate ( the rate at which banks lend to RBI) stands at 3.5%.
The move was taken in view to ease lending rates for corporate india and individiual borrowers in order to create demand in economy. however markets responded negatively to this move by plunging in red , falling by 261.14 points ending at 8185.35. lot of selling pressure came in from largecap stocks all making new 52 weeks low.
Even low inflation numbers couldnt turn up the market sentiments. Inflation came down to 3.03% for the week ended feburary 21.
Renewed FII selling is taking our markets down. However, next week a global rally can be expected as the US markets are in the highly oversold zone.
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