The market extended losses in last couple of hours of trade on Friday, with the falling more than 340 points intraday on the Sensex despite positive global cues. The dip in all sectoral indices as well as mid-smallcaps indicated that sentiment at traders and investors’ desk may have remained weak ahead of weekend especially due lingering concerns over banking space after the PNB fraud case.
Volatility in crude oil prices and increase in trade deficit also hit market sentiment.
The 30-share BSE Sensex gained more than 200 points in morning on positive global sentiment, but as the day progressed, it wiped out all those gains and shed nearly 500 points from day’s high, especially after top PSU lenders SBI and Bank of Baroda declared their exposure to the PNB fraud case that raised concerns over risk management in banking space.
The index closed down 286.71 points or 0.84 percent at 34,010.76.
Banking & financials, auto stocks and Reliance Industries dragged the 50-share NSE Nifty below 10,500 levels. The index hit an intraday high-low of 10,612.90-10,434.05, before ending down 93.20 points or 0.88 percent at 10,452.30.
Both benchmark indices closed flat for the week, after losing nearly 6 percent in previous two weeks.
The markets has been corrected for last 2-3 weeks but are not looking into any bubble territory, in fact they look reasonable and healthy, Porinju Veliyath, Founder of Equity Intelligence India said.
Pratik Gupta, Head of Equities, Deutsche Bank India is also not worried for market due to recent correction.
“Underlying corporate earnings recovery not only looks robust in India but also globally, and we are still constructive on equities which will continue to be the preferred asset class in current year,” Gupta said.
On the global front, most Asian stocks closed in the green, following positive lead from Wall Street. European markets, too, were trading higher by more than 0.6 percent at the time of writing this article.
Back home, the broader markets also caught in bear trap as the Nifty Midcap lost 388 points from day’s high to close down 1.14 percent. The market breadth was in favour of declines with advance-decline ratio at 1:3.
Nifty Bank shed as much as 437 points from day’s high to close down 1 percent while the PSU Bank index lost 2.5 percent.
Bank of Baroda, SBI, Union Bank shares fell 1.5-4 percent after disclosing exposure of nearly Rs 4,000 crore to the PNB fraud case.
PNB extended losses for third consecutive session, taking total three-day loss of 22 percent and losing market capitalisation of Rs 8,700 crore after it detected transaction fraud worth USD 1.8 billion (Rs 11,300 crore) in a Mumbai branch on Wednesday. It lost 6 percent intraday to hit a fresh 52-week low of Rs 120.60, before recovering in late trade to end down 2 percent.
Gitanjali Gems was locked at 20 percent lower circuit for second consecutive session after CBI registered fresh FIR against Gitanjali Group of companies in PNB fraud case. However, PC Jeweller staged significant recovery, rising nearly 7 percent after weak opening.
Reliance Industries, ICICI Bank, L&T, Eicher Motors, Maruti, Yes Bank, Tata Motors and Vedanta among others were down 1-3.6 percent whereas Infosys and Ambuja Cements gained more than a percent.
Varun Beverages shares lost 2 percent after it posted consolidated loss at Rs 72.2 crore for October-December quarter against loss of Rs 111.6 crore in year-ago.
Liquor companies Pincon Spirit, United Spirits, Globus Spirits, Radico Khaitan and United Breweries fell 2-4 percent after reports suggested that Karnataka government will raise excise duty on liquor by 8 percent.
OnMobile Global was up 5 percent as promoters increased stake in the company by 4.1 percent, taking total holding now to 42.53 percent.moneycontrol