Banking, rate-sensitive stocks drag Sensex down by 143 points

Written by feBureau | Agencies | Mumbai | Updated: Mar 16 2013, 09:25am hrs
The gains registered by the Indian equity indices last week proved to be short-lived as both Sensex and Nifty lost ground during the week as interest rate sensitive sectors came under heavy selling pressure. The fact that the Reserve Bank of India (RBI) is looking into reports of three leading private sector banks alleged to be involved in acts of money laundering also impacted investor sentiment.

The Sensex lost 143 points to close at 19,427.56 on Friday as 18 out of 30 scrips lost ground. The broader Nifty declined 0.62% or 36.35 points to close at 5,872.60. Both the indices have lost around 1.3% in the week. Interestingly, last week the benchmark indices managed to gain about 4% after losing ground for five consecutive weeks.

While Asian stocks ended on a mixed note on Friday, a lower opening in Europe as eurozone leaders eased constraints on national budgets amid a deepening recession further influenced the Indian markets.Bank stocks stayed in the limelight after a report alleged that three private sector banks ICICI Bank, HDFC Bank and Axis Bank were running a nationwide money laundering racket. The BSE Bankex was the second-worst performer of the day, losing 1.67% or more than 230 points. While ICICI Bank lost nearly 4% on Friday, Axis Bank and HDFC Bank lost 0.90% and 1.67%, respectively. In New Delhi, Financial Services secretary Rajiv Takru said both RBI and the ministry are collecting information about the issue. If facts are established, then whoever is guilty will pay the price, he added.

Meanwhile, the central bank is scheduled to announce its mid-quarter policy review on March 19. Foreign institutional investors (FIIs) net bought Indian shares worth $199 million on Friday.

Among other stock specific actions, Tata Motors slumped 3.3% to R291.10. The stock tumbled 4.2% this week after the company said that the sales of Jaguar Land Rover dropped 22% last month in China, its biggest market. Shares of Maruti lost nearly 1% to close at R1,406.70. Reliance Industries, owner of the worlds largest refining complex, lost 1.9% to close at R843.65. Gail India, the nations largest gas supplier, plunged 2.8% to Rs. 323.3.