Led by carnage in stocks of housing finance sectors and major sell-off in shares of market leader Reliance Industries as well as heavy correction in IT and banking sectors, the BSE sensex shed 464 points or 1.33 per cent to close at 34,315.63 points. Friday’s market movement is worrisome because stocks saw a free fall despite strengthening of Indian Rupees.
The broader NSE Nifty too fell around 150 points to crack below the 10,400-mark as 30 of its constituents declined. The 50-share NSE Nifty plunged 149.50 points, or 1.43 per cent, to end at 10,303.55.
Index major Reliance Industries plunged around 7 per cent in day trade despite record earnings in the second quarter. The stock later closed down by 4.11 per cent on BSE on concerns about decline in its gross refining margins. It earned USD 9.5 on turning every barrel of crude oil into fuel as compared to a gross refining margin of USD 12 per barrel. The GRM was also lower than USD 10.5 per barrel earning in the first quarter.
India Bull Housing, DHFL fell in the range of 14-20 per cents while Housing finance major HDFC declined 4.32 per cent on liquidity concerns even as the RBI announced steps to improve fund flows to NBFCs.
The RBI permitted banks to use Government securities equal to their incremental outstanding credit to NBFCs, over and above their outstanding credit to them as on October 19, to be used to meet liquidity coverage ratio requirements. It also increased single borrower exposure limit to non-infra NBFCs to 15 per cent from 10 per cent.
In IT sector Mindtree slumped by 19 per cent and others major IT companies also saw correction due to concerns over tightening H1-B visa norms. Infosys dropped 3.11 per cent and TCS by close to 1 per cent.
Yes Bank was the worst performer in the Sensex pack, losing a whopping 6.06 per cent, after the RBI refused to grant more time to its long serving CEO and MD Rana Kapoor and asked the private sector lender to appoint his successor latest by February 1, 2019.
Stocks of automakers too faced the heat on fears of lower sale this festive season due to prevailing lower liquidity from NBFCs. Other laggards were HDFC Ltd 4.32 per cent, Hero MotoCorp 3.70 per cent, Infosys 3.11 per cent, Tata Motors 2.46 per cent, M&M 2.44 per cent, Axis Bank 2.16 per cent, Maruti Suzuki 1.72 per cent, IndusInd Bank 1.70 per cent, Bajaj Auto 1.49 per cent, Asian Paint 1.45 per cent and ONGC 1.26 per cent.
