Sensex dips 300 points, Nifty down led by fall in private banks

Mumbai: Benchmark equity indices fell another 300 points on Monday, led by a fall in shares of private banks and steel companies. Investors exercised caution ahead of the release of the government’s borrowing plan for the second half of the fiscal year and fiscal deficit data, due later in the day.

The Sensex fell 301.94 points, or 0.75%,to 38,529.66, while the Nifty was down 86.25 points, or 0.75%, to 11,421.60.

"Fall in credit growth and several issues with PMC Bank, Lakshmi Vilas Bank and DHFL will hit sentiment. Although the current situation is not favourable, the future holds a lot of promises," according to Ashish Nanda, EVP and business head, PCG, commodities and currency business, Kotak securities.

Among private banks, Yes Bank fell 9%, RBI Bank 7%, Indusind Bank 6.2%, ICICI Bank 6.2% and Kotak Mahindra Bank 1.5%. The Nifty Private Bank index declined 2.1%.

"In the current week, the IPO of IRCTC and ETFs of CPSEs would raise nearly ₹8,500-9,000 crore, affecting the secondary market. The result season is about to start from the current month and monthly numbers from auto companies would keep the market volatile," Nanda added.

A subdued trend in Asian equities also kept Indian markets under pressure. Shares in Asia were off to a cautious start on investor apprehension as to how Chinese financial markets will react to the news of the Donald Trump administration's plans to delist Chinese companies from the US stock exchanges.

Among Asian markets, Hang Seng was up 0.11%, while Nikkei fell 0.5%. In the US, Down Jones fell 0.3% and S&P 500 was down 0.53%.

According to CR Forex Advisors, domestic equities will trade on a cautious note tracking their Asian peers, due to possibilities of an escalation in the US China trade war due to the White House's plans to delist Chinese companies from the US stock exchanges.

The Nifty50 has begun the consolidation phase after a massive rally and all short-term indicators have moved to overbought levels, capping the upside for the time being, it added.

Among Sensex gainers, Bharti Airtel rose 1.2%, followed by HCL Technology and ITC, which were up 1% each. Laggards included Yes Bank, Tata Steel, and Vedanta — all down 2% each. Among metal stocks, Hindalco Industries fell 2.3%, SAIL 2.3%, Vedanta 2.2%, NMDC 2.1% and JSW Steel 1.8%.

Lakshmi Vilas Bank fell 5% after the Reserve Bank of India placed the private bank under its prompt corrective action (PCA) framework.

Shares of Indiabulls' group companies were down as the Delhi High on Friday agreed to hear a Public Interest Litigation (PIL) filed against Indiabulls Housing Finance Ltd, alleging diversion of funds and accounting irregularities. Indiabulls Real Estate fell 10%, while Indiabulls Housing Finance was down 11%.