Falling for the second day, the BSE Sensex today ended about 363 points lower at 19,900.96 as investors continued to unwind positions in banking, realty and capital goods stocks after a surprise rate hike by the Reserve Bank of India's (RBI) new Governor Raghuram Rajan on Friday and on heightened fears that the another repo rate hike is coming to curb inflation - State Bank of India (SBI) shares amongst worst-hit.
After losing 383 points in the previous session as Reserve Bank of India unexpectedly hiked repo rate by 0.25 percentage points, the 30-share BSE Sensex lost another 362.75 points, or 1.79 per cent, to end at 19,900.96.
Among Sensex components, 22 stocks declined led by SBI, ICICI Bank, HDFC Bank, ITC, Jindal Steel & Power Ltd, Larsen & Toubro (L&T), Maruti Suzuki India, Oil & Natural Gas Corp (ONGC), Sun Pharmaceuticals Industries, Reliance Industries (RIL), Tata Motors, Tata Power and Tata Steel.
The market sentiment was also tepid ahead of the expiry of monthly derivative contracts on Thursday, traders said.
Similarly, the National Stock Exchange index Nifty dropped by 122.35 points, or 2.04 per cent, to close at 5,889.79, after touching the day's low of 5,871.40. It had lost 103.45 points in the previous session.
The BSE Banking sector index suffered the most as it lost 4.41 per cent, followed by Realty (4.33 per cent), Capital Goods (3.28 per cent), PSU (2.56 per cent) and Power (2.26 per cent). Bucking the general weakening trend, stocks in Information Technologies and Consumer Durable sectors gained on heavy buying.
Having been surprised by the repo rate increase on inflation concern, analysts from Standard Chartered, Credit Suisse and Nomura expect new RBI Governor Raghuram Rajan to hike repo rate by another 0.50 percentage points this fiscal.
"... we now expect RBI to increase repo rate by 0.25 per cent each