Indian stock markets fell heavily in the afternoon trades on Monday with Sensex diving 437 points as most of the bankers bleed. Shares of State Bank of India and Punjab National Bank plunged up to 10% in today’s trades with stocks of 8 PSU banks hitting their respective 52-week lows. The S&P BSE Sensex lost 437.24 points to hit the day’s low of 33,573.52 with shares of heavyweight companies such as SBI, L&T, Tata Steel, ITC, and ICICI Bank contributing massively to the index decline. The broader Nifty index also slumped heavily losing 143.85 points to the day’s low of 10,308.45.
Shares of almost all PSU banks have been tumbling since last week when PNB informed about the “unauthorised and fraudulent” transactions relating to the fake LOUs involving alleged diamond merchant Nirav Modi and the bank. Punjab National Bank said that the bank has detected unauthorised transactions worth Rs 11,393 crore in one of the branches in Mumbai. The stock of PNB is the worst hit among all of the PSU banking components in the period of last four days.
Today only, all the PSU bank stocks cracked with UCO Bank emerging as the biggest loser followed by United Bank of India, Allahabad Bank, scam-hit Punjab National Bank, Bank of Baroda, and Syndicate Bank. Shares of India’s largest bank by assets State Bank of India shed 5.52% to hit a day’s low of Rs 256.65 while the stock of Punjab National Bank slumped 9.56% to a day’s low of Rs 113.55 on NSE. Shares of UCO bank tanked 12.28% to a 52-week low of Rs 25 after the state-run bank confirmed that it has exposure of about Rs 2,636 crore in the Rs 11,400 crore fraud involving Nirav Modi and its associates.
Shares of Allahabad Bank plunged 11.3% to a 52-week low of Rs 48.65 after the bank said that it also has an exposure of around Rs 2,000 crore through the way of LOUs (Letter of Undertakings) issued by Punjab National Bank to Nirav Modi. Shares of Union Bank of India nosedived 11.95% to a 52-week low of 104.2 on NSE. Other PSU bank shares which tumbled to their respective 52-week lows include Syndicate Bank, Bank of India, Oriental Bank of Commerce, and Andhra Bank shedding up to 9%. The stocks of Bank of Baroda, Indian Bank and Canara Bank lost up to 9% with shares of Indian Bank losing the most.