Indices post biggest fall in 6 mths as inflation, valuation trigger selloff

Market experts said investors were spooked by the RBI's plan to drain cash from the banking system

India’s benchmark indices on Thursday posted their biggest single-day drop in about six months as concerns over inflation, valuations, and policy normalisation by the Reserve Bank of India (RBI) triggered risk-off bets. Sentiment was further dented by Morgan Stanley’s downgrading of Indian equities, becoming the latest foreign brokerage to sound a note of caution about the domestic market.

The Sensex closed at 59,984, down 1,158 points, or 1.9 per cent — the biggest decline since April 30. The index slipped below the 60,000 mark after 13 trading sessions. This was also its sixth-biggest fall of the year. The Nifty50 index