Sensex down around 200 points; banks fall

Reuters Market eye - The BSE Sensex and the Nifty are down 1 percent each, heading towards their fourth consecutive day of falls.

Rate sensitive stocks slump after sharply higher food prices drove up retail inflation to 11.24 percent in November raising expectations of a rate hike by the central bank when it meets on December 18 for monetary policy review.

ICICI Bank slips 3.6 percent, while mortgage lender Housing Development Finance Corp is down 0.5 percent.

Also, Reserve Bank of India Governor Raghuram Rajan said on Thursday there was not much room to indulge in monetary policy accommodation, given inflation was high.

Capital goods stocks fall after muddying policy, production at factories, mines and utilities shrank 1.8 percent year-on-year in October.

Larsen & Toubro is down 1.7 percent, while Bharat Heavy Electricals declines 3.9 percent.