Among banking stocks HDFC Bank, SBI, ICICI Bank and Axis were major losers. Surprisingly, HDFC gained 2 percent from previous close. DLF, Godrej Properties and Indiabull Real Estate were losers in realty space.
Rate sensitive stocks reacted negatively to the first monetary policy review post demonetisation. In a surprise move, the central bank kept key interest rate at 6.25 percent. Bankex closed 1 percent lower while Realty index lost 1.5 percent Wednesday.
Among banking stocks HDFC Bank, SBI, ICICI Bank and Axis were major losers. Surprisingly, HDFC gained 2 percent from previous close. DLF, Godrej Properties and Indiabulls Real Estate were losers in realty space.
The monetary policy committee (MPC) has also announced withdrawing 100 percent cash reserve ratio (CRR) from fortnight starting December 10. RBI had asked banks to park the entire mountain of additional cash as 100 percent cash reserve ratio (CRR) with the central bank.
Bank, realty stocks hit
From the fortnight beginning November 26, an incremental CRR of 100 percent was applied on the increase in net demand and time liabilities (NDTL) between September 16, 2016 and November 11, 2016 as a temporary measure to drain excess liquidity from the system. From November 28, liquidity absorption fell back and the Reserve Bank undertook variable rate repo auctions of Rs 3.3 trillion on November 28.
"As expected, money market conditions tightened thereafter and the weighted average call rate (WACR) traded near the upper bound of the LAF corridor on that day before dropping back to the policy repo rate on November 30," RBI says.