Bank scrips lead 1.9% Sensex fall

Banking stocks led the biggest drop in two weeks on Monday at Bombay Stock Exchange's Sensex as troubles in the US sub-prime housing markets triggered a fall in stock prices across the Asian markets.

Anita Gandhi, head of institutional business of Arihant Capital, said, "Even the Reserve Bank of India on a couple of occasions has pointed out that some of the local banks have been quite aggressive in their lending. And if they have any exposure to the US markets, then it is likely that they would be hit badly. One of the other indicators to judge this could be the ADR prices of these banks."

The Sensex shed 385.45, or 1.9 per cent, to 19,590.78. The index had its biggest decline since October 19. The S&P/CNX Nifty Index on the National Stock Exchange dropped 85.10, or 1.4 per cent, to 5,847.30.

The BSE Bankex Index was down by 2.08 per cent. ICICI Bank, which was down 4.49 per cent to Rs 1,270.85, was the top loser, followed by HDFC Bank (down 2.32 per cent at Rs 1,718).

All but two Asian markets declined on Monday as write downs on sub-prime mortgages by Citigroup is causing fear among investors, said dealers.