Sensex tumbles by 502 points last week

Mumbai: Fears over tightening of monetary policy and regulations for U.S. banks to invest in equities resulted in heavy selling, which pushed the Sensex down by 502 points or three percent last week.

The BSE benchmark Sensex fell below 16,000 mark to 15,982.08 during the last week, a level not seen since November 4, 2009. It ended at 16,357.96 as against previous weekend's level of 16,859.68, a net loss of 501.72 points or 2.98 percent. The Sensex dropped by more than 1,196.34 points or 6.82 percent in the past two weeks.

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Following Reserve Bank of India's decision to leave key interest rates unchanged while raising the cash reserve ratio (CRR) by 75 basis points, the fears over tightening of monetary policies were reduced temporarily. U.S. President Barack Obama planned to curb risk taking by financial institutions, stunned markets by unveiling new rules for U.S. banks that would restrict their size and prohibit them from certain business activities, a broker told PTI.

The NSE 50-share Nifty also dipped by 153.95 points or 3.06 percent to end the week below 5,000-mark at 4,882.05 as against previous weekend's level of 5,036.00. Interest rate related counters from realty and auto were the worst hit by heavy sell-off, while metal stocks too bore the brunt of selling on fall in its prices at London Metal Exchange and reports that China would further cool down its economy with policy actions.