With Tata group stocks and Axis Bank coming under selling pressure, Sensex on Wednesday plunged by 255 points to fall below the 28,000 level.
While bad loan worries came back to haunt the market after Axis Bank’s sharp drop in quarterly profit suggested all is not well on the bad loan front, Tata stocks were hammered again by investors as the recent developments involving the Tata group after the ouster of Cyrus Mistry as its chairman cast their shadow. Weak global leads following the decline in oil prices also added to the selling.
Tata group firms lost another Rs 10,000 crore for the second day on Wednesday, extending the total erosion in market capitalisation to more than Rs 21,000 crore following Cyrus Mistry’s ouster as Tata Group chairman. Shares of Tata Motors dipped 4.27 per cent, Tata Steel slumped 4.01 per cent, Tata Power lost 2.06 per cent and Tata Metaliks slipped 3.85 per cent. Tata Elxsi dropped 3.15 per cent, Tata Global Beverages (3.10 per cent), Tata Chemicals (2.83 per cent) and Tata Communications (2.68 per cent). “The escalation of the war between Cyrus Mistry and the Tata group led to the selling pressure,” said an analyst.
Financial stocks were the biggest contributors to the market decline, with BSE Bank index falling 1.89 per cent. Axis Bank topped the losers among the Sensex pack by tumbling 8.04 per cent to Rs 486.50 after the company’s July-September quarter net plunged by 83 per cent. ICICI Bank lost 3.65 per cent, PNB 1.61 per cent and Bank of Baroda 1.08 per cent.
The 30-share Sensex fell below the 28,000-mark and closed at 27,836.51 points, down 254.91 points, or 0.91 per cent. The barometer had lost 88 points in the previous session. The 50-share NSE Nifty settled lower by 76.05 points, or 0.88 per cent, at 8,615.25. Intra-day, it shuttled between 8,596.60 and 8,657.30.
“Unsurprisingly, banks led the falls today, and with more banks about to announce Q2 figures, investors are waiting to see if Axis’ numbers can be dismissed as a one-off case,” said Anand James, chief market strategist, Geojit BNP Paribas Financial Services. “If recent gains in banks rode on hopes that we were at the end of NPA cycle, Axis’ numbers have forced a rethink on the same. This, read along with selling mode that FIIs have been employing in equities in the last fortnight, investors are obviously taking a cautionary route ahead of US presidential election and Federal Reserve rate decision,” he said.
Jayant Manglik, president, Retail Distribution, Religare Securities said, “The market was mainly disappointed with the recent earning announcements. Weakness in Asian counterparts and cautiousness ahead of derivative expiry also weighed on the sentiment. As a result, profit taking was witnessed across the board, where banking and metal lost maximum among the sectoral indices.”
“If we take a closer look at today’s trade, three index majors — Tata Motors, ICICI Bank and Axis Bank — largely contributed to the fall while majority remained sideways or lost marginally in the end. So, it’s more to do with negative sentiments in select counters and caution ahead of expiry,” Manglik said.
Asian shares mostly retreated, hit by falling oil prices amid fresh fears after reports emerged that Russia will not take part in a planned oil output cut by major producers. Hong Kong’s Hang Seng fell 1.02 per cent while Shanghai Composite fell 0.50 per cent. Japan’s Nikkei, however, rose 0.15 per cent. Key indices in France, Germany and the UK were lower by up to 1.04 per cent.
For all the latest India News, download Indian Express App nowFirst Published on: October 27, 2016 3:00 am