Sensex tanks 368 points in early trade; bank stocks plunge

Mumbai, July 16: The BSE benchmark Sensex on Tuesday plunged over 368 points in early trade, snapping its three- session rising streak, pulled down by financial sector stocks, including ICICI Bank and HDFC, after the RBI raised lending rates for banks.

The 30-share barometer slipped below the 20,000 points level by tumbling 368.91 points, or 1.84 per cent, to 19,665.57 with all the sectoral indices led by banking and realty, trading in red with losses up to 4.83 per cent.

The index had gained over 741 points in the past three sessions.

The wide-based National Stock Exchange index, Nifty dipped below the 5,800 level by falling 101.95 points, or 1.69 per cent to, 5,928.85. Brokers said fresh spell of selling by participants after the RBI last night came out with a slew of measures, including hiking the lending rates for banks and sucking up Rs 12,000 crore to stem the rupee volatility, dampened the trading sentiment.

Under the measures announced, RBI raised lending rates to commercial banks 2 per cent to 10.25 per cent making the loans costlier.

They said, however, a firming trend in the Asian region following overnight gains on the US market, capped the losses on the domestic equity market.

The BSE banking index suffered the most by falling 4.83 per cent to 12,822.37 as stocks of SBI fell by 5.07 per cent to Rs 1,819, ICICI Bank by 5.25 per cent to Rs 1,007, HDFC Bank by 2.63 per cent to Rs 676.90 and Yes Bank by 8.21 per cent to Rs 459.40. In the Asian region, Hong Kong's Hang Seng index traded higher by 0.14 per cent, while Japan's Nikkei Index up 0.61 per cent, in early trade.

The US Dow Jones Industrial Average ended 0.13 per cent higher in Monday’s trade.