New Delhi: Registering its biggest fall in two weeks, the BSE benchmark, Sensex, on Monday plummeted by over 600 points as stocks led by banking sector nosedived on nervous selling by funds after the Reserve Bank announced a slew of tightening measures.
There was heavy selling in blue-chip stocks led by banks. The 30-share Sensex, dropped by 601.72 points, or 4.6 per cent, to 12470.38 at 1514 hrs IST. All the 30 stocks declined and the key index itself slipped by the biggest margin since March 14.
The BSE-30 share Sensex, which had gained over 92 points in the last trading session, started crashing within minutes of opening of the trading on Monday. Similarly, on the wide-based National Stock Exchange, Nifty declined by 191.80 points or 5.02 per cent at 3629.75.
Stock brokers said raising of short-term lending rates by 25 basis points to 7.75 per cent and also hike in Cash Reserve Ratio by half a percentage points to 6.5 per cent by the RBI, triggered the major sell-off.
Banking sector stocks were hit the hardest as the segment index fell by over 393 points or 6 per cent at 6,149 points. All the BSE-30 and NSE-50 stocks were in the negative zone with sizable losses.
On Friday, the Reserve Bank of India increased its overnight lending rate by a quarter percentage point to a four-and-half year high of 7.75 per cent. It also raised banks' reserve requirements for the third time since December to curb loans growth and curb inflation from 6.46 percent.
The rise in housing finance interest rate pulled down developer company stocks. Unitech slid Rs 19.350, or 5 per cent to Rs 368, Indiabulls Real Estate by Rs 17.50, or 5.9 per cent to Rs 280.60.
Fears of a fall in auto sales also influenced trading sentiment to some extent as Maruti Udyog fell Rs 42.70, or 5.2 per cent to Rs 777, Tata Motors by Rs 55.25, or 7.6 per cent to Rs 672.50.
About 660 shares have advanced, 1688 shares declined, and 61 shares are unchanged Index heavyweight Hindustan Lever was trading at Rs 195.05 down 4.97 per cent from its previous close of Rs 205.25.
Index heavyweight Reliance was trading at Rs 1,326.00 down 3.09 per cent from its previous close of Rs 1,368.35. Tech major Infosys was trading at Rs 1,931.75 down 4.02 per cent from its previous close of Rs 2,012.60.
Cigarette major ITC was trading at Rs 147.00 down 2.26 per cent from its previous close of Rs 150.40. Refinery major HPCL was trading at Rs 240.95 down 2.33 per cent from its previous close of Rs 246.70.
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