SBI tumbled over 6% to Rs 930. ICICI Bank dropped nearly 6% to Rs 805, and HDFC Bank declined 5% to Rs 902. ICICI Bank raised the benchmark-lending rate by 100 basis points to 15.75%, coming into effect from April 1 2007. It also hiked its floating reference rate for consumer loans, including home loans, by 100 basis points to 12.75%, with immediate effect.

Interest rate hike also caused realty stocks to dip. Indiabulls Real Estate, Parsvnath Developers, Sobha Developers, Anant Raj Industries, Unitech, and Mahindra Gesco Developers were the decliners for today.

Wipro declined over 7% to Rs 518. Larsen & Tourbo and HDFC were down nearly 6% each at Rs 1,525 and Rs 1,433, respectively. Satyam shed 5% to Rs 446, and BHEL lost 4.7% to Rs 2,154.

Reliance Industries declined 4.01% to Rs 1,313.50, despite signing an agreement for transporting natural gas with Gujarat State Petronet from Bhadbhut in Bharuch to Reliance’s refinery in Jamnagar, Gujarat.

6:30AM European market gained on Monday on M&A activities.
European markets were higher on Monday. By mid morning, Frankfurt Xetra Dax was 0.2% higher at 6,933.3, the CAC 40 in Paris added 0.1% to 5,641.31 and London FTSE 100 gained 0.3% to 6,328.7. National benchmarks rose in 11 of the 17 markets in western Europe that were open.

Advancers

Telecom Italia rose 11.2 % as the prospect of a bid war for the telecom group parent company Olimpia increased after interest from AT&T of the US and Mexico America Movil.

Pirelli, the Italian company which owns 80% of Olimpia, announced it was in talks with AT&T and America Movil, who are jointly bidding for a third each of Pirelli controlling stake in TI.

The news excited the rest of the sector, lifting Dutch peer KPN 4.1%. France Telecom climbed 2.8 %, while Britain BT Group added 2.1% and Germany Deutsche Telekom rose 2.7%.

Merger speculation keeps driving shares in DaimlerChrysler as the German carmaker was imminently expected to announce the sale of its US Chrysler unit. Weekend press reports suggested the division may fetch between 6 eurosbillion to 9 billion euros, driving DaimlerChrysler shares 1.4% higher.

Decliners

U.K. mortgage bank Northern Rock lost 0.4% after performing strongly since the middle of March. The company stated that it continues to trade strongly in the first quarter of 2007, putting it on track to meet its asset and profit growth strategy targets. Siemens declined 0.2%, while Nokia dipped 0.9%. Alcatel-Lucent shares were down 0.1% in Paris, while Ericsson shares declined 0.8% in Sweden.

Currrencies

The dollar was down against most other major currencies in European trading Monday. The euro traded at $1.3350, up from $1.3305 late Friday. The British pound traded at $1.9726, up from $1.9593. The dollar fetched 117.78 Japanese yen, down from 118.27.