After data revealed that India’s annual inflation rose to a three year high at 7 per cent, two whole percentage points higher than the RBI’s comfort level, stocks tumbled further. At around noon today, the Sensex was down 373 points or 2.36 per cent at 15,459.12, the low point of the day. The Nifty was down 96 points or 2.02 per cent at 4675.30, near the low of 4668.90.

This fall could be attributed to doubts in the investor’s mind about what new steps would be taken to curb inflation. While fiscal measures have already been taken, there is fear that monetary steps, in the form of hiking the CRR hike could be taken as soon as today, which is making investors even more jittery. Capital goods, technology, auto and banking shares were worst affected.

BHEL, HDFC , Mahindra & Mahindra , Larsen & Toubro and ITC were the biggest Sensex losers.

Ranbaxy Laboratories, Tata Steel and Hindustan Unilever were the only index gainers.

Again, Commerce Minister Kamal Nath maintained that the rise was primarily on account of supply side constraints.