Markets Tumbles in Second Half to Close in Red

The markets lost their way in the later half of the day in a seemingly belated reaction to the rate hike announced by the Reserve Bank. The Sensex surrendered almost 400 points from the day's highs to end at 18965, weaker by 186 points and the Nifty shut shop at 5685, down 58 points. The midcap index ended at 7222, weaker by 30 points and the small cap index ended at 8990, down 26 points. Rate sensitive stocks did a bulk of the damage in wake of the RBI decision to hike the rates for the seventh time since March last year. The BSE benchmark was cruising along in the morning session and in fact touched an intra-day high of 19340 as the banking space flared in a knee-jerk reaction to the rate hike announcement. But banks reversed direction from thereon on the apparent realisation that the banking regulator was behind the curve this time around as far as tackling inflation was concerned, dragging the benchmark indices on a downhill journey. Experts reckon that the RBI may opt for another 25 basis points hike in the March policy meeting, what with inflation remaining unabated. One may recollect that the Sensex had gained 143 points and the Nifty had added 46 points in the previous session.