Sensex down 143pts, bank shares fall on money laundering fears

The BSE benchmark Sensex today fell by nearly 143 points on heavy selling in private banks, including ICICI Bank and HDFC Bank, following government's promise that action will be taken if any person is found guilty in the alleged money laundering scam.
After gaining 208 points yesterday on rate cut hopes, the Bombay Stock Exchange 30-share gauge resumed stable. Soon it moved up to a high of 19,673.16 but started losing momentum after banking shares crumbled under heavy selling. It finally ended at 19,427.56, a fall of 142.88 points or 0.73 per cent.
Other interest-rate sensitive stocks from realty and auto sectors also saw profit-booking. Overall, 1,754 stocks fell on BSE while just 1,114 counters ended up. Investor wealth fell by Rs 35,000 crore to end at Rs 66.59 lakh crore.

Reflecting sell-off in the concerned private banks, ICICI Bank, HDFC Bank and Axis bank dropped between nearly 1-4 per cent. In New Delhi, Financial Services Secretary Rajiv Takru said both RBI and the Ministry are collecting information about the issue. If facts are established, then whoever is guilty will pay the price, he added.
"Banking stocks pared their recent gains after news of RBI probing the money-laundering practices in the said banks weakened investor sentiment," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
Yesterday, the country's three largest private banks were accused of indulging in money laundering both within and outside with online portal, Cobrapost claiming that a sting operation conducted by it has revealed a scam.

In 30-scrip Sensex, a total of 18 scrips including RIL, Bharti Airtel, GAIL, L&T, BHEL and Tata Motors fell.

Similarly, the NSE 50-issue CNX Nifty also dipped by 36.35 points or 0.62 per cent to end at 5,872.60.
While Asian stocks were mixed, a lower opening in Europe as eurozone leaders eased constraints on national budgets amid a deepening recession, further influenced the Indian markets.
Meanwhile, the Nalco public offer was fully subscribed before the close of market hours today. Its shares fell 8.81 per cent as government had fixed the sale's floor price at a steep discount.