The key benchmark indices drifted lower in choppy trade after US consumer confidence data dampened investor appetite for riskier assets like equities and high-yielding and growth-related currencies. Most global stocks were in red. The BSE 30-share Sensex fell 69.91 points or 0.43%, off close to 125 points from the day's high and up close to 140 points from the day's low. The market extended losses for the third day in a row. From a recent high of 16810.81 on 23 October 2009, the Sensex has lost 527.32 points or 3.13% in three trading sessions
The market breadth was weak. Index heavyweight Reliance Industries (RIL) jumped. Realty stocks also rose. But, metal and auto stocks fell.
Bank stocks fell for the second straight day as the RBI did not relax mark-to-market rules for bank's debt holdings at a quarterly policy review on Tuesday. The market was been agog with talks over the past few days of the central bank hiking the ceiling on the portion of government securities that banks can park in held-to-maturity (HTM).
Another trigger for the sharp slide in banking stocks was the central banks' decision to streamline provisioning requirement on non-performing assets. The RBI asked banks to ensure by September 2010 that the total provisioning coverage against non-performing or bad loans aren't less than 70% of the outstanding amount.
Intraday volatility was high as traders rolled positions in the derivatives segment from October 2009 series to November 2009 series ahead of the expiry October 2009 contracts on Thursday, 29 October 2009.
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