Benchmark indices fell on concerns that a increase in MSF requirements would push interest rates higher and hit corporates hard. The Nifty lost 75.55 points in trade.
Among the obvious losers in trade were the banking stocks which could be worst affected by the RBI move. Losers from the space were private sector banking names like HDFC Bank, IndusInd Bank and ICICI Bank. In fact, IndusInd saw ferocious selling and plummeted almost 8 per cent in trade, while Yes Bank was battered by as much as 9 per cent.
PSU banking stocks also dropped sharply in trade with notable losers from the space being Punjab National Bank and State Bank of India.
Heavyweights, Larsen and Toubro and HDFC were the other losers in trade. The only stocks that gained in trade from the Nifty were ITC, ONGC and Tata Consultancy Services.
The rate sensitive real estate stocks were also badly hit with notable losers from the space being HDIL, DLF and Unitech.
IT stocks once again remained resilient, despite gains in the rupee. Infosys and TCS both gained marginally in early trade. Kohinoor Foods was up 20% for the second day in succession after reports of a stake sale to a Abu Dhabi based food company.
Meanwhile, markets in Asia ended the day mixed with the Shanghai Composite and Hong Kong's Hang Sang ending with gains while the Singapore Strait Times and Seoul Composite lost ground.