Sensex sheds 144 pts in late sell-off; PNB stocks tumble 9.81% after reports of fraud transactions

Benchmark Sensex succumbed to fag- end profit-booking to end 144 points lower today after banking stocks tumbled on RBI's new norms for recognising stressedassets.

Punjab National Bank (PNB) plunged 9.81% after the state-owned lender said it has detected fraudulent transactions worth USD 1.77 billion (about Rs 11,335 crore). In a bid to hasten the resolution of bad loans, the RBI has tightened rules to make banks identify and tackle any non-payment of loans rapidly. The Reserve Bank of India abolished half a dozen existingloan-restructuring mechanisms and instead provided for a strict 180-day timeline for banks to agree on a resolutionplan in case of a default or else refer the account for bankruptcy.

The benchmark BSE index opened higher at 34,436.98 on positive domestic and global cues and advanced to hit a high of 34,473.43. However, it slipped on profit-booking to touch a low of 34,028.68. It finally ended 144.52 points or 0.42% down at 34,155.95. The NSE Nifty settled the day 38.85 points or 0.37% lower at 10,500.90 after shuttling between 10,590.55 and10,456.65, intra-day. Data released after market hours on Monday showed that industrial output expanded by 7.1% in December on robust performance by manufacturing and capital goods sectors. Retail inflation, on the other hand, eased marginally in January to 5.07% -- after touching a 17-month high of5.21% in December -- as food prices cooled. "Strong IIP growth and slowing retail inflation is providing some signs of stabilisation in economy. However, the broad market witnessed some volatility due to under- performance in financials.

"The PSU banks witnessed sell-off as RBI scrapped a number of loan-restructuring schemes which may lead to further jump in provisions, impacting profitability of these banks," said Vinod Nair, Head of Research, Geojit Financial Services. Meanwhile, foreign portfolio investors (FPIs) sold shares worth Rs 814.11 crore on net basis on Monday, while domestic institutional investors bought shares worth Rs 1,342.70 crore, provisional data showed. In the banking space, Yes Bank slipped 4.40%, SBI4.06%, Axis Bank 3.35%, ICICI Bank 2.29% and Bank of Baroda 1.75%. Other losers included ONGC, Sun Pharma, TCS, Power Grid, NTPC, ITC, Bajaj Auto, Maruti Suzuki, Dr Reddy's, Tata Steel,

Hero MotoCorp, Infosys, Kotak Mahindra Bank and Asian Paints, falling up to 2.62%. However, Coal India, RIL, Wipro, Bharti Airtel, Adani Ports, Tata Motors, L&T, HDFC Ltd, HUL and IndusInd Bank ended higher, rising up to 2.47%. The BSE mid-cap index edged higher by 0.17%, while small-caps gained 0.16%. Among the BSE sectoral indices, PSU fell the most at 1.80%, followed by banking (1.62%), healthcare (0.69%), power (0.68%), oil and gas (0.34 percent) and auto (0.30%). However, capital goods rose by 0.33%, realty 0.19% and infrastructure 0.12%.

Globally, Asian share markets ended mixed and European bourses opened higher as investors await US inflation numbers for clues on the pace of interest rate rises in the world's biggest economy. Japan's Nikkei fell by 0.43% and Singapore shed 0.36%, while Hong Kong's Hang Seng rose 2.27% and Shanghai Composite Index gained 0.45%. In the Eurozone, Paris CAC 40 rose 0.70% and Frankfurt moved up 0.76% in their early deals. UK's FTSE also traded higher 0.68%.