Bank stocks, US policy worries pull Sensex down 274 points

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On a weekly basis, both key indices recorded fall of 203.56 points, or 0.74 per cent, and 51 points, or 0.60 per cent, respectively.

The fall in bank stocks was triggered by private lender Axis Bank, which plunged 6.86 per cent after it reported a sharp 73 per cent decline in net profit at Rs 580 crore for the December quarter yesterday. ICICI Bank too faced selling pressure and lost 2.34 per cent to end at Rs 263.40 while state-run SBI fell 2.83 per cent.

“Till yesterday (Thursday), third quarter results were coming marginally above expectations and the market was holding a positive view. However, a poor set of numbers led by financials has annoyed the investors which has turned them cautious,” said Vinod Nair, head of Research, Geojit BNP Paribas Financial Services. The caution overshadowed better-than-expected China’s fourth quarter GDP growth and Fed chair Janet Yellen taking a less hawkish stance on rate hike. “Additionally, commodity stocks are losing their attractiveness due to consolidation ahead of the Trump swearing-in ceremony today. IT and pharma stocks will be keenly watched as the segment may be effected from the upcoming US policies,” Nair said.

Analysts said extreme nervousness ahead of Trump’s inaugural speech and uncertainty over the economic impact of his fiscal policies further dampened the market sentiment. Adani Ports, Tata Steel, NTPC, L&T, ONGC, Hero MotoCorp and M&M, among others, too kept the Sensex on the edge. Sector-wise, metal suffered the most by losing 2.37 per cent, followed by infra (2.04 per cent), PSU (1.97 per cent) and bank (1.77 per cent).

Jayant Manglik, president, Retail Distribution, Religare Securities, said, “Indian market ended the trading session on a jittery note amid high volatility as investors remained cautious ahead of the speech of the US President. Barring FMCG, all major indices saw selling pressure as the broader market sentiment remained subdued after Federal Reserve Chairman’s hawkish policy stance and unchanged policy rates by ECB, which were on the expected lines.”

Market participants are expecting robust budget for fiscal 2018 after the government’s strong move to ban the currency notes. “With more quarterly results in coming days, stock specific reaction will be seen but global factors will continue to weigh on the markets. The global market participants will keenly track the policy initiatives of the newly elected US President,” he said.

Meanwhile, the rupee failed to hold its early gains and ended lower by 5 paise to close at an over one-week low of 68.18 as the dollar gathered strength ahead of the US Presidential inauguration. A massive sell-off in domestic equities spooked by a series of weak corporate earnings predominantly weighed on trade and kept pressure on the Indian currency.

Axis bank stocks plunge

The fall in bank stocks was triggered by private lender. Axis Bank, which plunged 6.86 per cent after it reported a sharp 73 per cent decline in net profit at Rs 580 crore for the December quarter yesterday. ICICI Bank too faced selling pressure and lost 2.34 per cent to end at Rs 263.40 while state-run SBI fell 2.83 per cent. Analysts said extreme nervousness ahead of Trump’s inaugural speech and uncertainty over the economic impact of his fiscal policies further dampened the market sentiment.