Mumbai: Banking shares suffered sharply on the stock exchange in Mumbai today (July 5, 2004) due to heavy selling following RBI proposal regarding the maximum holding by an group in a private bank which pulled down the sensex by 26.81 points to close at 4843.77.

The volume of business was at a very low ebb and undertone was cautious ahead of the union budget scheduled on July 8.

Reserve Bank of India (RBI) had proposed that maximum holding by an entity or a group in a private bank could not exceed ten per cent and those whose holdings are in excess would have to find buyers who are willing to put this kind of money as pure investment or the existing holder will have to offload in the secondary market, a broker said.

As a result, operators offloaded bank stocks, partly dampening the market sentiment, he added.

The BSE-30 share sensitive index opened slightly lower at 4861.15 as against last Friday's close of 4870.58 and moved irregularly in a range between 4894.39 and 4831.85 before concluding at 4843.77, a net fall of 0.55 per cent.

Other weak spots like BHEL, Grasim, HPCL, ONGC, RIL, Tata Motors, ACC, GACL, MUL and Wipro caused the sensex to fall.

On the contrary, select pharma and fertilisers' counters were in keen demand and ended with smart gains on good buying support on expectation of getting some soaps in the forthcoming budget.

According to dealers, the market has entered a very crucial week, which would determine its future direction as everybody is waiting for the Union Budget to be presented on July eight.