Sensex slides 211 pts as banking stocks hit by new RBI steps
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Sensex slides 211 pts as banking stocks hit by new RBI steps

Last Updated: Wednesday, July 24, 2013, 21:57
 
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Sensex slides 211 pts as banking stocks hit by new RBI steps
Mumbai: Snapping a five-day rally, the BSE benchmark Sensex on Wednesday fell from 30-month high by losing over 211 points on heavy selling in banking stocks as new liquidity tightening steps unleashed by RBI to shore up rupee are likely to hike short-term interest rates.

The 30-share barometer, which had gained 451 points in past 5 days to hit levels last seen on January 5, 2011, tumbled by 211.45 points, or 1.04 percent to 20,090.65.

Investor wealth dropped a whopping Rs 78,000 crore today as 6 out every ten stocks fell on the BSE platform.

The BSE Banking index plunged 4.61 percent. SBI fell 3.13 percent, ICICI Bank by 3.73 percent, HDFC Bank by 3.40 percent and HDFC by 2.92 percent were notable losers.

Markets seemed to ignore rupee strengthening by 1.2 percent to over one-week high of 59.06 against dollar.

"Stocks markets sold off sharply on the back of fresh RBI measures. Due to these measures, banks having higher bulk borrowing would get impacted more as bond yields, CP & CD rates are likely to rise sharply," said Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities.

The 50-scrip National Stock Exchange index, Nifty dipped below 6,000 level by dropping 87.30 points, or 1.44 percent to end at 5,990.50. Also, SX40 index, the flagship index of MCX-SX, fell by 117.61 points, or 0.97 percent, at 11988.82.

Showing greater resolve to arrest rupee slide, RBI Tuesday evening scrapped the Rs 75,000 crore cap on bank borrowings through the daily liquidity adjustment facility, set up a daily limit of borrowings by individual banks and asked banks from July 27 to maintain a minimum daily CRR balance of 99 percent of the requirements.

Apart from banking shares, rate-sensitive sectors like consumer durables, capital goods, realty and auto saw selling today. Sensex constituents including BHEL, Hero MotoCorp, Hindalco, Hindustan Unilever, Reliance Industries, Maruti Suzuki, Mahindra and Mahindra, Larsen and Toubro, Tata Power and Tata Steel were major losers.

Besides cautious trades ahead of tomorrow's monthly derivative expiry, brokers said a mixed trend in the global markets also affected domestic markets.

PTI


First Published: Wednesday, July 24, 2013, 09:53


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