Mumbai: Leading the fall in the broader market, rate sensitive banks and realty stocks Monday witnessed intense selling pressure and declined by up to 4.3 percent as RBI in an unexpected move kept interest rates unchanged.
"RBI kept both repo rate and CRR unchanged as against the market expectations of at least 25 basis points reduction. Markets reacted negatively to the news and witnessed sharp sell-off," Bonanza Portfolio Research Analyst Shanu Goel said.
Financial stocks took the biggest hit with SBI leading the pack of losers as it lost 4.36 percent, while ICICI Bank shed 3.34 percent, HDFC Bank was down 2.71 percent, PNB slipped 4.04 percent and Canara Bank dropped 4.02 percent.
Led by losses in these stocks, the BSE bankex index ended at 11,220.87, down 3.16 percent.
"RBI has kept the rates unchanged. And consequently investors in equities felt disappointed. It is very clear that fighting inflation is a priority for RBI," Milan Bavishi, Head (Research), Inventure Growth & Securities, said.
Among realty stocks, DLF was down 4.57 percent, HDIL (3.50 percent), Unitech (3.02 percent) and Indiabulls Real Estate (3.20 percent).
Following the dip in real estate stocks, the BSE realty index closed 2.78 percent down at 1,577.78.
From the auto pack, Ashok Leyland lost 3.28 percent, Maruti Suzuki fell 1.49 percent and Tata Motors lost 0.85 percent.
"From the market's perspective, this is disappointing and it will now have to wait for the government action and monsoon progress to see any sustained uptrend. Any liquidity infusion globally, may also support markets," Dipen Shah, head of Fundamental Research at Kotak Securities, said.
Meanwhile in the broader market, the BSE Sensex finished the day at 16,705.83, down 244 points.
In the process, the total investor wealth got eroded by Rs 74,617.18 crore.
PTI
First Published: Monday, June 18, 2012, 20:34