1. Sensex under pressure from Axis Bank’s asset quality woes; index loses 100 points, stock tanks over 7%

Sensex under pressure from Axis Bank’s asset quality woes; index loses 100 points, stock tanks over 7%

Sensex and Nifty edged lower after a four-day gaining streak as pessimism increased amid the market participants following a lower-than-expected second-quarter earnings led by the third-largest private sector bank Axis Bank.

By: | Updated: October 18, 2017 10:26 AM
Bombay Stock Exchange building. (Image: Wikimedia Commons)

Sensex and Nifty edged lower after a four-day gaining streak as pessimism increased amid the market participants following a lower-than-expected second-quarter earnings led by the third-largest private sector bank Axis Bank. BSE Sensex lost 90.6 points to open at 32,518.56 and NSE Nifty dripped 25.05 points to start at 10,209.4. Meanwhile, The Dow Jones Industrial Average — benchmark index of NYSE breached the 23,000-point mark for the first time in the intraday trade on Tuesday. Within minutes of trading, both the key indices extended losses. The benchmark Sensex slipped 128.97 points to hit the day’s low of 32,480.19 points while the broader Nifty tripped 44.75 points to mark the day’s low of 10,189.7 points.

Shares of Axis Bank were the biggest loser on Sensex after the bank reported a fresh slippage, assets turning into bad loans, to the tune of Rs 8,936 crore, including Rs 4,867 crore in “divergence” found by the Reserve Bank on its FY17 provisions treatment. The stock of Axis Bank 7.44% to hit the day’s low of Rs 475 on BSE. However, Axis Bank posted a 38% rise in the July-September net profit to Rs 432 crore versus Rs 319 crore in the corresponding quarter last year and Rs 1,305 crore in April-June quarter of FY 2018.

Following the dent in the asset quality of Axis Bank, shares of ICICI Bank and State Bank of India fell 2.32% to Rs 267.55 and 1.73% to Rs 246.8 respectively. The stocks of these three heavyweight companies contributed the most to the index decline, shaved off as much as 120 points from the Sensex while Reliance Industries, Kotak Mahindra Bank, and HDFC Bank helped to trim the losses.

On the other hand, shares of Wipro topped the Sensex after India’s IT bellwether reported more than 5% quarter-on-quarter rise in consolidated net profit at Rs 2,190 crore for the quarter ended 30 September 2017 against Rs 2,083 crore in the previous quarter ended June 30, 2017. The stock of Wipro jumped 3.16% to the day’s high of Rs 298.65. Shares of Kotak Mahindra Bank, Reliance Industries, Power Grid, and ONGC were the major gainers apart from Wipro, advanced up to 1.26% on BSE.

The Dow Jones Industrial Average briefly broke above the 23,000-point mark for the first time on Tuesday, driven by strong earnings from UnitedHealth and Johnson & Johnson, but finished the session just below that milestone. The blue-chip index, which surpassed similar 1,000-point marks three times previously this year, has been steadily inching higher and is up 2.6 percent so far this month, putting it on track for a seventh straight monthly advance, Reuters reported. The Dow Jones Industrial Average rose 40.48 points or 0.18% to end at 22,997.44, a record closing high. It rose as high as 23,002.2 during the session. The S&P 500 gained 1.72 points, or 0.07% to 2,559.36, also a record high close. The Nasdaq Composite dipped 0.35 point, or 0.01% to 6,623.66.

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