Sensex plunges 499 pts as bank stocks, Coal India drag markets
MUMBAI: The Bombay Stock Exchange’s benchmark Sensex plunged almost 1.7% on Friday amid profit-booking as disappointing earnings by ICICI Bank and Bank of Baroda dragged lenders and the government’s discounted stake sale hit Coal India’s shares.
“The Coal India OFS (offer for sale) issue on Friday seems to have taken the wind off the market rally with the indices witnessing a free-fall,” said Amar Ambani, head of research at IIFL, adding, that profit booking also weighed on the broader markets.
The Sensex ended at 29,182.95, down 499 points, or 1.7%, after hitting a fresh high of 29,844.16 intra-day. The broader Nifty ended the day at 8,808.90, down 143 points, or 1.6%.
“Markets fell largely on the back of worse-than-expected asset quality numbers declared by banks,” said Kamlesh Rao, CEO, Kotak Securities.
ICICI Bank posted a record quarterly profit, but a rise in net non-performing assets disappointed the Street.
India’s largest lender State Bank of India tumbled over 5%.
Among other big losers, pharmaceutical major Dr Reddy’s Labs tumbled 3.6%, Housing Development Finance Corp was down 3.4% and automobile stocks — Mahindra & Mahindra, Tata Motors and Maruti Suzuki — fell 2.5%, 2.1% and 1.1%, respectively.
In the coming week, all eyes will be on the Reserve Bank of India’s bi-monthly monetary policy announcement.
According to analysts, while the direction of the policy is clear, the pace of further easing of key interest rates will depend on the inflation trends, government’s performance on fiscal consolidation front and policy reforms that could ease supply-side constraints.