Stocks fall for third day

Domestic stocks succumbed to last-hour sell-offs on Tuesday, with the benchmark BSE Sensex slipping over 71 points, or 0.21 per cent, to mark its third straight session loss, as private banks put a dampener on the momentum created by IT counters.

Also, a massive plunge in the rupee’s value, sustained foreign fund outflows and the developments around the Punjab National Bank (PNB) scam led to a caution among participants.

Private sector lenders Axis Bank, Kotak Bank, Yes Bank, ICICI Bank, HDFC Bank saw their shares drop as much as 1.44 per cent on Tuesday, but losses were capped by technology and metals stocks.

Software industry body Nasscom sounded optimistic, saying the mood is upbeat and the trend is positive, which should translate into better business opportunities for IT companies.

One more silver lining was a recovery in PSU lenders, which recouped losses to end in the green on short-covering.

“The market started off on a positive note due to shortcovering after the recent fall. But the gains did not sustain due to selling pressure in private banks and rising bond yield. Strengthening dollar and prospects of increased spending in technology set the IT index attractive. Expiry-led volatility is expected in coming days and market participants are likely to stay away,” Vinod Nair, head of research, Geojit Financial Services, said.

Rating agency Fitch on Tuesday placed PNB on ‘rating watch negative’, reflecting a possibility of downgrade following the $1.77-billion fraud at one of its Mumbai branches. PNB shares after remaining in negative for most part of the session to hit a 52-week low of ~111, managed to end a shade higher, snapping its four-day losing streak.

The rupee has depreciated 68 paise to hit a three-month low of 64.88 (intra-day) against the greenback, adding to the negativity on domestic bourses. The 30-share Sensex closed the day at 33,703.59. The broader NSE Nifty closed lower by 18 points, or 0.17 per cent, at 10,360.40.

Foreign portfolio investors sold net shares worth ~8.5 billion on Tuesday, while their domestic counterparts were net buyers to the tune of ~14.4 billion, according to provisional data.

Among the Sensex components, M&M emerged as the biggest loser by falling 2.48 per cent, followed by Axis Bank 1.44 per cent, to ~531.70.

Coal India was the biggest gainer in the Sensex kitty, rising 1.90 per cent, followed by State Bank of India, which advanced 1.81 per cent.