BSE Sensex fell off highs as banks extend declines,weighed down by the RBI measures to drain Indian rupee liquidity and after HDFC Bank Ltd’s results failed to instil confidence in upcoming banking earnings for April-June.
Lenders such as Yes Bank Ltd and other financial firms fall for a second day after the Reserve Bank of India raised short-term interest rates to curb the rupee’s slide.
Financial companies dependent on short-term wholesale funding will be the most affected by RBI’s measures to curb liquidity,analysts say.
Yes Bank falls 5.2 percent after dropping 9.9 percent on Tuesday,while IndusInd Bank Ltd is down 2.2 percent.
HDFC Bank falls 2.4 percent after its asset quality,valued by the market at about $27 billion,worsened slightly,with net non-performing loans as a percentage of total assets at 0.3 percent compared with 0.2 percent a year earlier.