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Sensex drops 150 points on policy-review worries

The 30-share index fell 151.42 points to 19,647.77 on emergence of selling in interest rate-linked banking stocks. It partially wiped off the gains from past three sessions.

twitter-logo PTI   Mumbai     Last Updated: December 15, 2010  | 17:35 IST

The Bombay Stock Exchange benchmark Sensex on Wednesday dropped over 150 points to cut short three days of winning streak with investors turning cautious after a increase in petrol prices ahead of the Reserve Bank's monetary policy review on Thursday.

The 30-share barometre fell 151.42 points to 19,647.77 on emergence of selling in interest rate-linked banking and realty stocks. Wednesday's loss partially wiped off the 550-point gain in the past three trading sessions.

In a similar fashion, the broad-based National Stock Exchange index Nifty lost 51.80 points to 5,892.30.

Marketmen said selling was more or less confined to banking and realty sectors ahead of RBI monetary policy review. Investors speculated the apex bank will signal a raise in interest rates to anchor inflationary expectations in view of petrol prices going up.

Trading sentiment was also influenced by a steep fall in the Asian region and lower opening in Europe after Moody's rating agency placed Spain on review for a possible down grade, sparking fresh worries over the Euro-zone debt crisis.

Marketmen said sentiment was also jolted by deepening crisis in the 2G spectrum licensing scam, following reports of CBI raids in several places in Tamil Nadu and residential premises of corporate lobbyist Niira Radia and former Trai Chairman Pradip Baijal.

The realty sector index suffered was the worst-hit at 3.53 per cent. Investors feared a hike in interest rate might slow down construction business and sale of homes.

Unitech suffered major losses. The second-biggest developer by assets, fell 2.21 per cent to Rs 61.90 after the company's mobile-phone joint venture received a government order asking it to explain why the telecom licence should not be cancelled.

The banking sector index was second worst performer - losing 3.18 per cent. ICICI Bank lost 3.65 per cent to Rs 1,078.05 and State Bank of India 3.46 per cent to Rs 2,696.05.

The oil & gas sector index fell 0.09 per cent to 10,647.96 following an increase in petrol prices.

Bucking the general weakening trend, stocks in IT and tech sectors gained on signs of US economic recovery.

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