Mumbai, Jun 18 (IANS): Bank stocks tanked Monday as hopes faded away of a rate-cut by the Reserve Bank of India (RBI) in its mid-quarter review of monetary policy 2012-13.
The RBI kept key lending rates unchanged to control high inflation. The re-purchase rate remains unchanged at eight percent, which automatically keeps the reverse re-purchase rate at seven percent.
The move assumes significances as the RBI was expected to cut these key rates that would have translated in lowering of interest being paid by consumers on their loans for consumer durables, homes or automobiles. Economic experts feel that the bearish consumer sentiment on account of high interest rates will continue.
The news dragged the banking stocks down with the bank index at the Bombay Stock Exchange (BSE) falling 411.20 points around 2:30 p.m. and stood at 11,175.45 points. Scrips of banking majors such as State Bank of India (SBI), ICICI Bank and HDFC Bank all tumbled.
The stock of SBI, India's largest lender, was down 94.80 points or 4.34 percent and stood at Rs.2,112.30, followed by ICICI Bank whose scrip fell by 33.40 points or 3.95 percentage at Rs.811.50, and HDFC Bank stock was down 16.50 points or 3.01 percent at Rs.531.35.
Realty sector too took a hit with the sectoral index at BSE down 50.95 points at 1,571.91 points.
Automobile index too fell by a huge 102.59 points and stood at 9,111.21 points. Scrip of automobile major Maruti Suzuki fell by 23 points or 2.08 percent at Rs.1,085, followed by Tata Motors, down 4.80 points or two percent at Rs.235.25, Hero MotoCorp, down 21.05 points or 1.05 percent at Rs.1,979, and Mahindra and Mahindra whose scrip fell by 5.30 points or 0.76 points at Rs.692.10.
As hopes of a rate-cut by the RBI in its mid-quarter review of monetary policy 2012-13 faded, the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) slipped 302.31 points around 2:30 p.m.
The Sensex, which opened at 17,039.54 points, was down 302.31 points, or 1.78 percent from its previous close of 16,949.83 points, and stood at 16,647.52 points.
The Sensex touched a high of 17,109.95 points and a low of 16,636.09 points in the early session of trade. The BSE midcap index was down 76.46 points while the smallcap index fell 50.60 points.
The wider 50-scrip S&P CNX Nifty of the National Stock Exchange was 1.75 percent or 89.80 points lower at 5,049.25 points.