Banks drag as Sensex sheds 200 points

Markets have extended losses tracking weak cues from Asia. The Sensex and Nifty are trading below 15,300 mark and 4,600 levels respectively. 

By 1120 hrs, the Sensex was down 236 points at 15,256 and the 50-share Nifty slashed down 72 points at 4,580.

On the global front, Fitch has put six euro zone members on short-term downgrade watch while S&P downgraded rating of six Portugal banks to junk. Moody's downgraded Belgium's credit rating by two notches - from Aa1 to Aa3.

In reacting to the news, Asian markets like Shanghai, Hang Seng, Kospi and Taiwan have fallen 2-4%. Nikkei is down 1% and Straits Times has dropped 2%. 

Back home, banking shares led the decline after the RBI, at its monetary policy review Friday, kept key policy rates and cash reserve ratio unchanged. SBI and ICICI Bank have tumbled between 3-4%. HDFC Bank was down 2%.

In the capital goods sector, majors like L&T and BHEL have plummeted 3% each after recent data showed sharp contraction in industrial output.

Technology majors TCS, Infosys and Wipro lost 1.8% each. The Indian rupee has depreciated to 53.15 versus the US dollar.

In the realty segment, DLF has dropped by 3%.

Hindustan Unilever and Tata Motors have bucked the weak trend gaining 1% each.

Among other shares, Borosil Glass Works has rallied 6% to Rs 820 on the commencement of buyback offer today. The company proposed to buy back its own shares at a price not exceeding Rs 850 a share payable in cash for an aggregate amount not exceeding Rs 81.93 crore.

Pantaloon Retail (India) rallied in the early trades today post the news that the government would explore the possibility of implementing the decision on foreign direct investment (FDI) in multi-brand retail through consultations with political parties after completion of Assembly elections in five states next year.

The broader indices too are witnessing sharp sell off – BSE Midcap and Smallcap indices are down 2% each.

The market breadth in BSE remains healthy with 503 advancing and 1821 shares declining.