By IANS,
Mumbai : Indian stock markets fell sharply Tuesday after the central bank said it has hiked the statutory liquidity ratio for commercial banks and will change its stance on the accomodative policy for housing and finance companies.
The market sentiments were hit after the Reserve Bank of India (RBI) hiked the statutory liquidity ratio for commercial banks by 100 basis points while keeping key policy rates intact. The move will suck away some liquid cash from the financial system.
Also, by ending the repurchase facility for non-banking finance companies, mutual funds and housing finance companies, the central bank has taken away one of the windows for easier credit to such institutions.
As a result of these announcements, the benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE) tanked more than 272 points, or 1.62 percent, to 16,699.09 points, some three hours into trading.
The broader S&P CNX Nifty of the National Stock Exchange (NSE) also fell to 4,878.7 points, down 1.85 percent, or 92 points, data available with the bourses showed.
The realty index of the BSE was down as much as 6.99 percent, while the indices for the metals and banking sectors were down 4.15 percet and 3.11 percent, respectively.
The top losers among the Sensex stocks included DLF, down 6.42 percent at Rs.402.50; ICICI Bank, down 5.13 percent at Rs.845; Sterlite, down 4.5 percent at Rs.786.05; and Tata Steel, down 4.37 percent at Rs.516.95.
Other Asian markets too were trading in the red.