Markets lose steam on global cues; banks, auto stocks tank

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Published: September 26, 2019 1:07:10 AM

The Bank Nifty gave up 597 points on Wednesday as emergence of trouble in one of the large co-operative banks and profit booking dragged the index down for a second day. The index has lost about 980 points in the last two sessions.

Shares of State Bank of India plunged as much as 7.4% on NSE to mark its biggest single-day fall in over four years.Shares of State Bank of India plunged as much as 7.4% on NSE to mark its biggest single-day fall in over four years.

The Sensex on Wednesday snapped its three-day winning streak to end the session at 38,593.52 points, falling 503.62 points, or 1.3%. The broader Nifty50 fell for a second day to settle at 11,440.20 points, down 148 points. Investor sentiment soured with Indian equities following global peers on Wednesday after US lawmakers’ decision to call for an impeachment inquiry against President Donald Trump and rising worries over US-China trade deal.

Auto and bank stocks, which rallied the most following a cut in corporate tax rate, fell sharply as investors chose to book some profit. The Bank Nifty index, which surged about 14% between September 20 and 23, declined 3.2% in the last two trading sessions. The gauge for PSU Bank stocks — Nifty PSU Bank Index — shed 7.8% in the last two days after gaining 9.5% between Friday and Monday.

The Bank Nifty gave up 597 points on Wednesday as emergence of trouble in one of the large co-operative banks and profit booking dragged the index down for a second day. The index has lost about 980 points in the last two sessions.

Shares of State Bank of India plunged as much as 7.4% on NSE to mark its biggest single-day fall in over four years.

That was followed by Tata Motors and Maruti Suzuki, each falling over 5%. Eicher Motors and Mahindra & Mahindra declined 4.5% and 4.3%. respectively.

Gaurav Dua, senior VP, head – capital market strategy & investments, Sharekhan by BNP Paribas, believes global uncertainties and weakness in equities across regions nipped the recent upsurge in Indian equities post the announcement of fiscal stimulus last Friday, adding, “The approval of impeachment investigations against the US President has unnerved the markets. The political uncertainty in the USA at the time of slowdown in economy could certainly put further brakes on the global economic growth in the near term.”

Moreover, the emergence of trouble in one of the large co-operative banks and possibility of the margin squeeze for public sector banks pulled down the Bank Nifty and the overall markets, Dua said. Meanwhile, foreign portfolio investors (FPIs) have resumed selling Indian equities, offloaded shares worth $105.44 million on Tuesday and another $48.2 million on Wednesday, provisional data on bourses showed. With two-day sale, overseas investors have so far sold $529 million worth of share in September.

Investor wealth drops by Rs 1.84 lakh cr
Investors saw their wealth plunge by Rs 1.84 lakh crore on Wednesday, following heavy losses in the equity market where the benchmark Sensex plummeted 504 points. Dragged by massive sell-offs, the market capitalisation of BSE-listed firms tumbled by Rs 1,84,483.79 crore to Rs 1,46,88,763.39 crore.

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