ICICI fell 2.4 percent to 686 rupees, its lowest in almost two years, at 9:58 a.m. DLF declined 3.8 percent to the lowest since it began trading in July. The Bombay Stock Exchange's Bankex Index lost 3.3 percent, and the real estate index shed 4 percent.

The Reserve Bank of India unexpectedly lifted interest rates yesterday for the second time in two weeks and told lenders to keep more cash in reserve after the surge in crude-oil prices pushed inflation to a 13-year high. The central bank also signaled it will keep raising borrowing costs.

``Banks could raise lending and deposit rates by 75 to 100 basis points in response to the policy announcement,'' Sampath Kumar, an analyst at Goldman Sachs Group Inc., wrote in a note to clients today. ``Increase in lending rates would likely adversely affect market expectations on loan growth, net interest margins and asset quality.''

The Reserve Bank increased the repurchase rate by 0.5 percentage point to 8.5 percent, the biggest move since 2000, and adjusted the cash-reserve ratio by a similar margin to 8.75 percent.

Before yesterday's move, the central bank had raised the repurchase rate eight times in the past 2 1/2 years and increased the cash reserve ratio seven times since December 2006 to slow money supply and cool inflation.

The central bank's monetary tightening had already led to a 43 percent slump in the Bombay Stock Exchange's bank index this year, and a 60 percent plunge in the real estate index, outpacing the 30 percent drop in the nation's equity benchmark Sensitive Index.