Markets plunge on global sell-off, crisis at Yes Bank
BLEAK SENTIMENT Investors get poorer by ₹3.28 lakh cr as Sensex nosedives
NEW DELHI: The Sensex plunged 8 9 4 poi nt s whil e t he Nif t y crashed below the key 11,000mark on Friday as regulatory curbs on Yes Bank triggered a crisis of confidence among domestic investors.
A heavy sell-off in global markets on coronavirus concerns took a further toll on risk sentiment, traders said.
After nosediving over 1,459 poi nt s during t he day, t he 30-share BSE Sensex settled 893.99 points or 2.32% lower at 37,576.62. Likewise, the broader NSE Nifty tanked 279.55 points or 2.48% to close at 10,989.45.
Banking counters wilted under selling pressure, with Yes Bank plummeting over 55%, after the Reserve Bank of India (RBI) placed the lender under a moratorium, capping deposit withdrawals at ₹ 50, 000 per account for a month and superseding its board.
The unusual move late on Thursday evening came hours after finance ministry sources confirmed that State Bank of India (SBI) was directed to bail out the troubled lender, once a Dalal Street darling.
Tata Steel was the top laggard in the Sensex pack, cracking 6.51%, followed by SBI, IndusInd Bank, HDFC, ICICI Bank and Oil and Natural Gas Corp (ONGC).
Bajaj Auto, Maruti Suzuki and Asian Paints were the only gainers.
During the week, the Sensex plunged 720.67 points or 1.88%, while Nifty sank 212.30 points or 1.89%.
According to analysts, investors took the Yes Bank episode very negatively, raising questions on the stability of the overall Indian financial system.
“Another bank bites the dust. This time its Yes Bank—one of the large private sector banks. RBI has stepped in and leading state-owned institutions are patching up a bailout plan for the bank and more importantly, safeguard the interest of depositors. However, the already weak sentiments have been dented further.the series of accidents in the Indian financial sector sends out a very poor message to the foreign investors. The negative bias is expected would sustain in the near term,” said Gaurav Dua, senior vice-president, head - capital market strategy and investments, Sharekhan by BNP Paribas.
Meanwhile, finance minister Nirmala Sitharaman and central bank governor Shaktikanta Das on Friday assured Yes Bank depositors that their money is safe and all steps will be taken to ensure stability in the financial sector.
All BSE s ectoral i ndices ended in the red, with metal plunging 4.40%, followed by bankex, finance, energy, realty, oil and gas, power and industrials.
The broader BSE midcap and smallcap indices too skidded up to 2.36%.
World markets sank deeper into red as the coronavirus outbreak stoked fears of a global recession.
Bourses in Shanghai, Hong Kong, Seoul and Tokyo sank over 2%.
European benchmarks were also trading significantly lower in their morning sessions.
Brent crude oil futures fell 2.54% to $48.72 per barrel.
On the currency front, the Indian rupee depreciated 32 paise t o 73.24 per US dollar (intraday).
Meanwhile, a sharp plunge in the equity market made investors poorer by ₹3.28 lakh crore on Friday as the BSE barometer Sensex plummeted over 1,400 points in early trade led by massive sell-off in banking, metal and energy stocks.
Tracking the plunge in the indices, the market capitalisation of the Bse-listed companies dropped by ₹3,28,684.5 crore to ₹1,44,31,224.41 crore.