Sensex skids 155 pts as banks play spoilsport

Markets buckled under selling pressure on Monday as wary investors offloaded banking and financial services stocks amid a drumbeat of negative news from the sector.

The BSE Sensex tumbled 155.24 points or 0.40 per cent to finish at 38,667.33, while the broader NSE Nifty dropped 37.95 points or 0.33 per cent to 11,474.45.

Market sentiment was jolted by a slew of reports highlighting governance and structural issues in the financial services space, traders said.

Lakshmi Vilas Bank shares tumbled about 5 per cent to hit its lower circuit limit after the RBI initiated prompt corrective action against the lender due to high NPA levels amid allegations of wrongdoings by some directors.

The regulatory action may cast doubts over its proposed merger with Indiabulls Housing Finance, which too plunged over 30 per cent.

Reliance Capital dived over 14 per cent after the company decided to exit the lending business.

All this comes against the backdrop of Punjab and Maharashtra Cooperative (PMC) ...