MARKET WRAP: Sensex falls 537 pts, Nifty ends at 10,975 as financials crack

In the broader markets, the S&P BSE MidCap index settled 2.4 per cent lower while the S&P BSE SmallCap index slipped 2.7 per cent on Monday.

The benchmark indices settled lower for the fifth straight session, falling 1.5 per cent weighed by financial and automobile stocks.

The S&P BSE Sensex ended at 36,305, down 537 points. The index had hit an intraday low of 36,216.95. The broader Nifty50 index settled at 10,975, down 168 points, hitting an intraday low of 10,943.60.

The bank stocks ended in red with Nifty Bank index slipping 2.6 per cent due to fall in share prices of RBL Bank and Punjab National Bank (PNB). The Nifty Auto index also fell 3.7 per cent due to a fall in Mahindra & Mahindra and Eicher Motors.

In the broader markets, the S&P BSE MidCap index settled 2.4 per cent while the S&P BSE SmallCap index slipped 2.7 per cent.

Seeking to calm the nerves of worried investors, Finance Minister Arun Jaitley on Monday said that the government would take all measures to ensure adequate liquidity for non-banking financial companies (NBFCs) and mutual funds. The minister's remarks come in the wake of stock markets witnessing sudden and stiff fall in intra-day trade on Friday over concerns of a liquidity crisis being faced by some of the NBFCs.

The Reserve Bank of India (RBI) and the market regulator Securities and Exchange Board of India (SEBI) are closely monitoring developments in financial markets and are ready to take appropriate steps if needed, a central bank statement said on Sunday.

NBFCs extend fall

Shares of non-banking financial companies (NBFCs), including housing finance companies (HFCs), continued to remain under pressure for the fifth straight trading day on the bourses amid the ongoing crisis at the Infrastructure Leasing and Financial Services Ltd (IL&FS).
 

Bajaj Finance, Indiabulls Housing Finance, Reliance Home Finance, Central Bank of India, Cholamandalam Investment and Finance Company and Ujjivan Financial Services were down in the range of 5 per cent to 15 per cent on the National Stock Exchange (NSE) in intra-day trade. READ MORE

Global Markets

Asian shares stumbled in holiday-thinned trading on Monday as China’s decision to cancel talks with the United States sparked fears of a protracted trade war, while oil rallied as Saudi Arabia ruled out increasing supplies to cool crude prices.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell almost 1 per cent. Hong Kong was the worst performer with its Hang Seng index down 1.7 per cent.

Share markets in major Asian centres Japan, China and South Korea were closed for a holiday on Monday, while currency markets were subdued as banks in those countries were shut.

Investors were squarely focused on the Sino-US trade war as China added $60 billion of US products to its import tariff list, retaliating against US duties on $200 billion of Chinese goods that came into effect earlier on Monday.

(with wire inputs)

3:47 PM

Nifty Bank ends 2.62% lower. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)	VOLUME
RBL BANK	528.70	564.60	-35.90	-6.36	2439591
PUNJAB NATL.BANK	68.85	72.85	-4.00	-5.49	37473021
INDUSIND BANK	1674.20	1762.45	-88.25	-5.01	4685458
IDFC BANK	38.55	40.50	-1.95	-4.81	13407362

3:41 PM

Nifty sectoral losers of the day

3:39 PM

BSE Sensex: HDFC, M&M, IndusInd Bank among top losers of the day

3:32 PM

Market at close

 

The S&P BSE Sensex ended at 36,305, down 537 points while the broader Nifty50 index settled at 10,975, down 168 points.

3:17 PM

DHFL, Infibeam Avenues, ITNL up over 10% after Friday's fall

Shares of Dewan Housing Finance Limited (DHFL), Infibeam Avenues and IL&FS Transportation Networks were trading over 10% higher on back of heavy volumes on Monday, after crashing up to 42% on Friday on the BSE.
 

DHFL has surged 25% to Rs 439 on the BSE in intra-day trade after the company said it has received re-affirmation of credit ratings from CARE and ICRA. The stock rallied 78% from its 52-week low of Rs 246 touched on September 21 during intra-day trade. READ MORE

3:00 PM

A shadow looms: India needs to stop the IL&FS rot from spreading

A tad late, but the message is finally reaching India’s regulators: Infrastructure lender IL&FS is not a business that can be allowed to fail without consequences. An unusual Sunday evening joint statement by the securities regulator and the central bank suggests a much-needed awareness of systemic risks.

 

Infrastructure Leasing & Financial Services Ltd. is a sprawling nonbank institution that used its highly rated paper to chalk up $12.5 billion of debt, which it funneled into the financing of long-term assets like roads, townships and water-treatment plants. Most of these businesses are owned by IL&FS-linked operating companies. READ MORE

2:44 PM

NBFCs are a high-risk bet now; bottom-fishing here is fraught with risks

Do non-banking financial companies (NBFCs) and housing finance companies (NFCs) offer good entry points at recent dips post Friday’s free-fall? Well, investors should consider some key points before bottom fishing in these stocks.

 

Friday’s fall was not on account of systematic crisis or any fundamental concerns on part of these packs, say experts. Liquidity and profitability concerns weighed on these two packs. Thus, asset-liability management (ALM) is critical to understand. READ MORE

2:31 PM

IL&FS crisis: Was correction in NBFC stocks overdue, given rich valuations?

A sharp decline in share prices of non-banking finance companies (NBFCs) on Friday is forcing some analysts to ask the obvious question: Was the correction overdue, given the sector’s rich valuation despite the steady rise in bond yields, which is set to raise lenders’ cost of funds, adversely affecting their margins? The country's top retail NBFCs are trading at 23.5 times their trailing 12-months earnings nearly 500 basis points higher than the sector's 15-year average price to earnings multiple of 18.4 times. READ MORE

2:18 PM

Analysts see more downside for markets; remain selective on banks & NBFCs

Indian equity markets extended their slump for the fifth consecutive session as financial stocks continued to tumble amid the ongoing crisis at IL&FS. The S&P BSE Sensex hit an intra-day low of 36,239 levels, while the Nifty50 touched a low of 10,946 levels.

 

Analysts say the markets (S&P BSE Sensex is down over 800 points in two sessions) have been caught in a contagion of a sell-off in banking and NBFC segments, which can accentuate further. Moreover, factors such as rate hikes by the US Federal Reserve, crude oil prices, rupee and trade relations between US and China will also have a bearing on the overall sentiment. READ MORE

2:03 PM

NEWS ALERT Brent crude oil rises to $80.51 per bbl, highest since November 2014, according to TV reports

1:59 PM

Market Check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	36,266.52	-575.08	-1.56
S&P BSE SENSEX 50	11,471.37	-182.57	-1.57
S&P BSE SENSEX Next 50	32,233.56	-896.95	-2.71
S&P BSE 100	11,208.53	-198.12	-1.74
S&P BSE Bharat 22 Index	3,516.41	-42.73	-1.20

(Source: BSE)

1:44 PM

Maruti Suzuki, YES Bank, Jet Airways, Godrej Properties hit 52-week low

Shares of YES Bank, Maruti Suzuki India, Jet Airways, Godrej Properties, Finolex Industries, Edelweiss Financial Services and Eveready Industries are among 68 stocks from the Nifty 500 index that have hit their respective 52-week low as the benchmark indices trade 1% down tracking weakness in Asian markets.
 

Reliance Capital, Reliance Power and Reliance Infrastructure from Anil Ambani Group, Allahabad Bank, Central Bank of India, Karnataka Bank, Karur Vysya Bank, Ujjivan Financial Services, IFCI, Manappuram Finance and PNB Housing Finance from the financials too hit 52-week lows today. READ MORE

1:30 PM

Raymond m-cap doubles on strong profit growth, firm to expand across India

Fabric and apparel maker Raymond has seen its market capitalisation double to Rs 46 billion over the past two and a half years, outperforming most peers. Even as the compound annual growth rate (CAGR) in revenue was just 3 per cent, net profit grew 26 per cent a year.

 

Raymond’s performance comes on the back of its asset-light retail expansion, continued growth by existing apparel brands, and steady B2B numbers despite demonetisation hurting apparel players. READ MORE

1:18 PM

Investors in large MF schemes to gain most as Sebi cuts total expense ratio

The Securities and Exchange Board of India (Sebi) has announced cut in total expense ratio (TER) for equity mutual fund schemes. The cut in TER—the fees charged to investors by a fund house—will have to be done at a scheme level as per slabs set by the regulator.

 

An analysis by Prabhudas Lilladher shows schemes with large corpus will see highest reduction in TER of up to 25 basis points. READ MORE

1:06 PM

Nifty Bank trades nearly 2% lower. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)	VOLUME
RBL BANK	538.55	564.60	-26.05	-4.61	1472263
INDUSIND BANK	1688.30	1762.45	-74.15	-4.21	2512249
PUNJAB NATL.BANK	70.10	72.85	-2.75	-3.77	26185713
IDFC BANK	39.10	40.50	-1.40	-3.46	8950823
BANK OF BARODA	108.45	111.45	-3.00	-2.69	20631473