Sensex down 183 points as markets react to RBI measures

Banking index down 4.83 per cent as ICICI Bank, SBI and HDFC scrips tank.

The BSE benchmark Sensex today fell by over 183 points — ending a three-day rally — pulled down by banking and financial sector stocks, including ICICI Bank, SBI and HDFC, after the Reserve Bank’s steps to quell rupee’s volatility sparked concerns of rate hikes.

The 30-share index commenced the day’s trade weaker by a whopping 368 points from its previous close at 19,665.57. It, however, trimmed some of the losses during the day and closed lower by 183.25 points, or 0.91 per cent, at 19,851.23.

Similarly, the wide-based National Stock Exchange index Nifty lost 75.55 points, or 1.25 per cent, to close at 5,955.25. Also, SX40 index, the flagship index of MCX-SX, closed 85.33 points, or 0.71 per cent lower at 11,854.7.

Brokers said the trading sentiment, mainly in banking and financial sector stocks, was dampened after RBI announced a slew of measures to curb rupee volatility late last night, including hiking the lending rates for banks and sucking up Rs 12,000 crore through bond sales, to make the currency dearer.

This also raised concerns of RBI increasing interest rates in its first quarter monetary policy review later this month, they said, adding that a weakening trend in the overseas markets — even as German investor confidence unexpectedly dropped — also hit the trading sentiment.

Meanwhile, the rupee appreciated by a hefty 68 paise to 59.21 against the dollar intraday today.

Out of the 30 Sensex components, 17 stocks ended in the red including the country’s largest private sector lender ICICI Bank (tanking 5.61 per cent to Rs 1,003.20), the largest lender SBI (4.57 per cent) and mortgage major HDFC (3.88 per cent).

Among major losers from the banking pack on the BSE were YES Bank (9.78 per cent), Oriental Bank of Commerce (8.95 per cent) and Canara Bank (8.64 per cent).

Sector wise, interest-rate sensitive realty sector index suffered the most, falling 5.84 per cent to 1,457.29, followed by the bank index (down 4.83 per cent to 12,821.09) and capital goods (down 2.23 per cent to 9399.05).