Rate sensitive stocks extend losses

MUMBAI: There was no respite for rate sensitive stocks on Tuesday as investors continued to dump shares given no signs of revival in credit demand despite a slew of measures by the Reserve Bank of India.

Sentiments suffered another jolt on worsening global economic outlook after reports of more economies slipping into recession. Overnight weakness in the US and similar trends on the other Asian bourses, especially in financial stocks, mainly triggered the sell-off in banking shares in India as well.

Speaking at the 24th India Economic Summit, ICICI Bank chief KV Kamath said interest rates in India have to come down by another 2-3 percentage points in order to stimulate demand in the economy.

The Reserve Bank of India has taken a string of measures over the past few weeks to improve liquidity and boost growth, cutting its key lending rate - the repo - by 150 basis points to 7.5 per cent and lowering banks' reserve requirements.

At 10:30 am, BSE Bankex, down 3.8 per cent, was the biggest sectoral loser with Kotak Bank (-5.86%), ICICI Bank (-4.48%), HDFC Bank (-2.1%), Axis Bank (-3.57%) and State Bank of India (-2.84%) posting significant losses.