New Delhi, Jan 17 (IANS): Markets have slumped further with the BSE Sensex now plunging more than 1,600 points in afternoon trade on Wednesday.

Sensex is down 2.2 per cent or 1,611 points at 71,516 points.

Private sector banks, metals are leading the market fall which is awash in a sea of red.

Private sector bank stocks are the biggest losers on Wednesday as the Sensex plunged 1,300 points.

Index heavyweight, HDFC Bank is down more than 8 per cent, Kotak Mahindra is down more than 3 per cent, Axis Bank is down 3 per cent, ICICI Bank is down 2 per cent.

Tata Steel is down more than 3 per cent while JSW Steel is down more than 2 per cent.

Elara Securities said in a report that HDFC Bank’s Q3 PAT of Rs 163.7bn was broadly in line with our estimates following higher other income (stake sale in Bandhan Bank) and lower tax, even as core profitability fell short of expectations.

The key highlight was higher-than-expected strain on NIM (even on trimmed expectations), given higher funding cost pressures.

Given the regulator’s focus on CD ratio and HDFCB already at 110 per cent, with LCR of 110 per cent, the bank has much to balance (growth versus NIM conundrum). While one may argue on bottoming of earnings, we believe recovery may take longer and the stock may see time correction till investors find merit in execution, the report said.