Indian stock markets ended lower on Tuesday ahead of the third-quarter GDP with Sensex dipping 99 points as shares of all of the PSU banks collapsed with the stock of scam-hit PNB crashing nearly 13%. Among the Sensex scrips, shares of Bharti Airtel, Dr Reddy’s, Hero MotoCorp, NTPC, Reliance Industries and Power Grid topped the index while shares of ICICI Bank, HDFC, Axis Bank and State Bank of India contributed the most to Sensex declines. The S&P BSE Sensex lost 99.36 points or 0.29% to finish at 34,346.39 and NSE Nifty washed off 28.3 points or 0.27% to settle at 10,554.3. The GDP data for the third-quarter ended 31 December 2017 is due on Wednesday, 28 February 2018.
PNB shares plunge
Shares of Punjab National Bank witnessed a major jolt today slipping below Rs 100 per share after the state-run lender had said that the fraud amount of Rs 11,394 crore may increase by $204 million or Rs 1,323 crore. The stock of PNB nosedived as much as 14.12% to a 20-month low of Rs 96.1 before closing down 12.11% at Rs 98.35. In a late-night regulatory filing, PNB said the quantum of “reported unauthorized transactions” can increase by $204 million. A huge trading volume was observed in the shares of PNB, more than 21.7 crore shares exchanged hands on both NSE and BSE with about 20.2 crore shares on NSE alone.
Shares of Punjab National Bank had been broadly falling for the last 10 days since after the back informed about the “unauthorised and fraudulent transactions” amounting $1.77 billion on 14 February 2018. During the 10-day free-fall in the share prices of PNB, shares have dropped 39%. Following a huge decline in the stock prices, PNB has lost Rs 15,374 crore in the market capitalisation. The billionaire diamond merchant Nirav Modi is accused of getting buyer’s credit from Indian lenders on the basis of fake LOU (Letters of Undertaking) issued by Punjab National Bank.
Bloodshed in PSU banks
In order to put a closer check on PSBs (public sector banks), Financial Services Secretary Rajiv Kumar has said that all MDs of PSU banks have been directed to detect bank frauds and consequential wilful default in time and refer cases to CBI. Further, PSU banks have to examine all NPA (non-performing asset) accounts for more than Rs 50 crore for possible fraud. “PSB MDs directed to detect bank frauds & consequential wilful default in time & refer cases to CBI. To examine all NPA accounts > Rs 50Cr for possible fraud. Involve ED/DRI for PMLA/FEMA/EXIM violations if any,” Rajiv Kumar said in a tweet.
Shares of other PSU banks such as Bank of India, IDBI Bank, Canara Bank, Indian Bank, Union Bank of India, Syndicate Bank, State Bank of India, Bank of Baroda, Andhra Bank and Allahabad Bank plummeted 1-8%. Earlier today, Rajiv Kumar said that all public sector banks (PSBs) have been given a 15-day deadline to take pre-emptive action and identify weakness to gear up for rising operational and technical risks after the fraud amount of PNB widened to Rs 12,700 crore.
Market at glance
Among the sectoral indices of NSE, Nifty PSU Bank, Nifty Realty, Nifty Media, Nifty Bank, and Nifty Financial Services lost up to 1.7%. Shares of heavyweight companies such as ICICI Bank, Axis Bank, State Bank of India, HDFC, Maruti Suzuki, Kotak Mahindra Bank, Sun Pharma and HDFC Bank contributed the most to the Sensex losses on Tuesday. Collectively these eight stocks alone wiped off 168 points out of the 99-point plunge in the index. Amid the broader market indices of NSE, other than Nifty 50 index, Nifty next 50, Nifty Midcap 50, Nifty 100, Nifty 200, Nifty 500, Nifty Mid100 Free, Nifty Small100 Free lost up to 1%.