The Banking sector is the biggest loser on the markets today, led by Yes Bank. The stock is down over 8% at Rs.403 and prior to that it had slipped to the days low point at Rs.402. Its 52-week low is at Rs.322.30.

This stock and entire banking sector is painted red after the RBI, once again in a surprise move, announced a slew of measures to curb money supply and put a lid of the falling rupee. It restricted the limit of individual bank borrowing to 0.50 percent of its total deposits outstanding as on the last Friday of the second preceding fortnight from the RBI's daily borrowing window called Liquidity Adjustment Facility (LAF) in banking parlance. RBI also increased banks' daily minimum need of cash reserve ratio (CRR) to 99% from 70% currently with effect from July 27. It scrapped its earlier measure limiting total LAF borrowings to the tune of 1% of total deposits or Rs 75,000 crore and that had become effective from July 17, 2013.

The move on CRR is almost like an indirect CRR hike and these measures are sure to suck out liquidity from the market, with call rates and bond yields expected to soar in the short term. These moves have impacted sentiments and Yes Bank is to declare its numbers today and that has made the fall on its even more accelerated.

RBI is have a Credit Policy on 30^th July and there is now talk of a rate hike and thus all rate sensitive sectors – auto and realty stocks are also down.