Bank, realty stocks plunge as RBI keeps rate unchanged

Interest-rate sensitive bank and realty stocks on Tuesday witnessed selling pressure after the Reserve Bank of India (RBI) left interest rate unchanged.

Among banking scrips, Punjab National Bank (PNB) tumbled 7.16 per cent, Axis Bank plunged 3.24 per cent and Kotak Mahindra Bank lost 2.86 per cent on the Bombay Stock Exchange (BSE).

HDFC Bank fell by 1.95 per cent, while SBI was quoting 1.72 per cent down and ICICI Bank lost 1.54 per cent.

Tracking weakness in these stocks, the BSE banking index was trading 1.71 per cent lower at 22,392.80.

From the realty pack, stocks of Anant Raj fell by 4.63 per cent, Unitech was down 4.14 per cent, Housing Development and Infrastructure (HDFC) went down by 3.58 per cent and Indiabulls Real Estate shed 3.13 per cent on the BSE.

DLF was trading lower by 2.12 per cent and Prestige Estates was down 1.14 per cent.

The BSE realty index was trading with a loss of 1.24 per cent at 1,793.13.

Disappointing markets and the industry, RBI Governor Raghuram Rajan on Tuesday left interest rate unchanged, saying there are no developments to warrant further easing since the unscheduled rate cut about a fortnight ago.

RBI kept the benchmark repurchase rate at 7.75 per cent, but cut the statutory liquidity ratio (SLR) - the amount of funds that lenders must set aside - by 50 basis points to 21.5 per cent of deposits from February 7, a move that will help banks to increase lending.

Stock markets fell sharply soon after the policy was announced.

The broader market also surrendered its initial gains and the benchmark Sensex was quoting down by 219.43 points to 28,902.84 at 12:15 pm.