New Delhi: For the stock markets, the Financial Year 2007-08 started in a dismal way with the Bombay Stock Exchange's benchmark Sensex crashing down by 616.73 points on Monday.
After opening in deep red on the first trading day of the new Financial Year, the markets continued its downtrend on fears that Reserve Bank's move to curb money supply would result in harder interest rates that could shave off growth in sectors ranging from real estate to automobile.
Rate sensitive sectors banking, auto and real estate stocks bore the brunt of hike in rates. The breadth was extremely negative. Auto numbers for March came in mixed, Bajaj Auto and Hero Honda disappointed while, TVS and Maruti Udyog beat street expectations.
The Bombay Stock Exchange sensitive index, Sensex, plummeted by 616.73 points, or 4.7 per cent to 12,455.37 as all the 30 stocks in the index led by banks declined, posting the largest lost since June 8, 2006.
The Bombay Stock Exchange's 16-stock banking index slumped 6 per cent to 6,152.59. The National Stock Exchange index Nifty declined 4.9 per cent to 3,633.60.
Already, banks including the second top lender ICICI Bank announced a hike in its prime lending rate following RBI's decision on Friday to increase its key short-term lending rate (repo) and CRR - the amount of deposits that commercial banks are required to park with the central bank.
RBI's move was expected to suck out Rs 15,500 crore from the system.
ICICI Bank's shares dropped Rs 48.60, or 5.7 per cent at Rs 804.50, State Bank of India, the biggest lender, fell Rs 62.65 or 6.3 per cent at Rs 930.25 and HDFC Bank by Rs 47.80, or 5 per cent at Rs 901.60.
Fears of a fall in auto sales also influenced trading sentiment to some extent as Maruti Udyog fell Rs 6630, or 8 per cent at Rs 753.40, Tata Motors by Rs 58.50, or 7.6 per cent to Rs 669.25.
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