Sensex drops 207 pts

The Bombay Stock Exchange (BSE) benchmark, Sensex, on Wednesday fell by 207 points to close at 17,362.10 on intense selling across banking, realty and auto stocks, triggered by rating agency Moody's lower outlook on the banking system and State Bank of India’s rising level of bad loans. The 30-share Sensex resumed higher and witnessed alternate bouts of buying and selling in early trade. Soon, intense selling pressure emerged, bringing down the barometer to 17,362.10 at close, a net loss of 207.43 points or 1.2 per cent.

The National Stock Exchange Nifty fell by 68.30 points, or 1.3 per cent, to 5,221.05. “The banking sector disturbed the overall sentiment for the day. SBI reporting higher than expected NPAs and Moody’s downgrade of the Indian banking system to ‘negative’ were enough to create capitulation in stocks,” said Milan Bavishi, head (research), Inventure Growth and Securities.

Amid worries of mounting bad loans, the SBI scrip tanked 6.7 per cent to end the day as the biggest Sensex loser.

Tata Steel (4 per cent), Maruti Suzuki (3.8 per cent), Hindalco (3.7 per cent) and DLF (3.6 per cent) were the other biggest losers. Bucking the trend, Hindustan Unilever rose by 2.85 per cent, followed by IT majors Wipro (2.1 per cent) and TCS (1.78 per cent). Hero MotoCorp, too, gained 0.91 per cent.

Among the sectoral indices, the BSE-Bankex fell 2.62 per cent. BSE-Metal and BSE-Realty fell 2.5 per cent and 2.48 per cent, respectively.