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Wrap-up| Banking stocks sink Sensex

Wrap-up| Banking stocks sink Sensex
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First Published: Mon, May 02 2011. 05 34 PM IST
Updated: Mon, May 02 2011. 05 34 PM IST
N ew Delhi: Indian stocks closed lower on concerns that the Reserve Bank of India might increase key policy rates by 50 basis points. A sharp hike in policy rate is expected to increase borrowing costs of the companies. This led to selling in key benchmark index stocks, pulling the Sensex below 19,000-mark.
Sensex: 18,998 –0.72%
Nifty: 5,701 –0.84%
Banking stocks led the losses in the Nifty-50 shares. Apart from the hike in policy rates, investors are also concerned that the RBI will increase interest rate on savings banks accounts by 50 bps. A hike in savings bank rate is expected to impact earnings of the banks.
State Bank of India: Rs 2,688 –4.16%
Kotak Mahindra Bank: Rs 412 –4.09%
Punjab National Bank: Rs 1,149 –2.97%
IDFC also lost as much as 4% on weak fourth-quarter earnings. The company reported a net profit of Rs 287 crore against analysts’ expectations of Rs 319 crore. A steep fall in non-interest income and high provisions led to lower profits in the fourth quarter. Ambuja Cements, on the hand, lost more than 3% after the company said shipments in April fell by 2.4% to 1.86 million tones.
IDFC: Rs 139 –3.85%
Ambuja Cements: Rs 153 –3.10%
Apart from banking, oil & gas, metal and automobile indices led the losses on the BSE. With a rate hike looking imminent, investors sold automobile stocks on concerns that high interest rates might deter vehicle purchases.
BSE Bankex: 12,804 –2.08%
BSE Oil & Gas: 9,873 –1.34%
BSE Metal: 16,021 –1.04%
BSE Auto: 9,462 –1.02%
Overall, 61.40% of the stocks traded on the BSE closed the day with losses.
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First Published: Mon, May 02 2011. 05 34 PM IST
More Topics: Markets Update | BSE | NSE | Sensex | RBI |