New Delhi/ Mumbai, June 04 (ANI): The Bombay Stock Exchange (BSE) Sensex slumped for a second straight session as a forecast for lower-than-expected monsoon rains raised concerns that the Reserve Bank of India (RBI) will not cut interest rates any more this year, sending lenders such as State Bank of India sharply lower. Midcap infrastructure and property developers also bore the brunt of the sell-off, with Unitech Ltd losing 35.7 percent as investors were worried that companies would find it difficult to reduce debt levels should the central bank hold off on rate cuts. Although the RBI cut interest rates on Tuesday (June 02), it issued a cautious statement on inflation that soured sentiment. Those concerns were reinforced when India cut this year’s monsoon forecast to 88 percent of the long-term average, raising fears of the first drought in six years. A poll before the RBI’s policy review on Tuesday had showed analysts were previously expecting an additional rate cut of 25 basis points later this year. Experts also say stagnation of the industrial economy and market perceptions that rate easing will not happen are taking a toll on these stocks.
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