Sensex dips on Turkey crisis

Mumbai, Aug. 13: The benchmark Sensex on Monday logged its second straight session loss, tumbling over 224 points to a near two-week low of 37,645 on massive sell-offs mainly in financial stocks as the battered rupee and Turkish financial crisis spooked investors.

The broader NSE Nifty too fell by 73.75 points to end at 11,355.75.

The rupee on Monday plummeted to its life-time low of 69.85 (intra-day) against the US dollar, tracking global cues.

A massive selling pressure was seen in financials and PSU shares after constant fall in Turkish lira fuelled demand for safe havens.

“Flare-up of tensions between the US and Turkey hit global financial markets by surprise and the ripple effect has seen in domestic market too. Despite upbeat June IIP growth of 7 per cent, weak global cues and deprecating rupee-led investors to book profits. However, considering revival in corporate earnings, declining oil prices, improving domestic macros and reversal in FIIs flows, the downside for the market is largely protected,” Vinod Nair, Head of Research, Geojit Financial Services, said.

Among banking stocks, SBI dived 3.17 per cent after the lender reported a hefty loss of `4,876 crore for June quarter.

Other lenders such as PNB, Yes Bank, Bank of Baroda, Federal Bank, Axis Bank, HDFC Bank and ICICI Bank fell by up to 3.37 per cent.

Among Sensex constituents, Vedanta fell 3.40 per cent, followed by SBI 3.17 per cent, Yes Bank 3.11 per cent, Axis Bank 1.68 per cent, ONGC 1.60 per cent, Power Grid 1.52 per cent and HDFC 1.48 per cent.

Other laggards were RIL 1.40 per cent, Asian Paints 1.39 per cent, NTPC 1.28 per cent, HDFC Bank 1.15 per cent, Tata Steel 1.10 per cent, HUL 0.90 per cent, ICICI Bank 0.88 per cent, Tata Motors 0.68 per cent, Maruti Suzuki 0.67 per cent, Hero MotoCorp 0.48 per cent, Adani Ports 0.29 per cent and Bharti Airtel 0.14 per cent.

Asian and European shares too fell tracking last week’s sell-offs on Wall Street. Investor sentiment took a hefty blow as Turkish currency, lira, crisis fears spread to financial markets globally.

Meanwhile, the outlook for the country’s banking sector is likely to remain negative until its capital position strengthens in proportion to the bad loans and weak financial performances, according to Fitch Ratings.

The rating agency said the $151-billion stock of bad loans remains a risk for the sector’s weak income base, which is vulnerable to ageing provisions and slower nonperforming loans (NPLs) resolution.

The Sensex, which resumed lower at 37,693.19, continued its slide and touched a low of 37,559.26 as selling intensified. —