Mkts tumble again; PNB ripples felt across bank stocks

Indian equities tumbled for the second straight day today, with the Sensex diving over 236 points to a nearly two-month low of 33,775 as metal and banking counters took a beating and the massive PNB fraud continued to weigh on investors' sentiment. State-run banks continued to felt the ripples of the massive Rs 11,400-crore fraud detected at the Punjab National Bank's Brady Road branch as their stocks slumped and many of them hit their 52-week lows during the intra-day trade. Tata Steel emerged as the worst hit among Sensex companies with a 5.82 per cent fall following reports that the company is among those that have expressed interest to take over debt-laden Bhushan Steel. Besides, renewed concerns that a rebound in global crude oil prices will have an adverse impact on fiscal deficit too kept participants cautious. The 30-share Sensex, which had lost 286.71 points in the previous session on Friday, plunged by 236.10 points, or 0.69 per cent, to end at 33,774.66 after touching a low of 33,554.37 intra-day. This is the weakest closing since December 21 last year when it had closed at 33,756.20. Also, the broader Nifty too declined by 73.90 points, or 0.71 per cent, to end at 10,378.40. It stayed in the negative terrain through the session and a hit a low of 10,302.75.

"Weak domestic cues continued to impact investors sentiment and directed the market to consolidation. PSU banks are likely to remain under pressure due to the current irregularities while participants are taking a wait and watch approach until the storm settles. Volatility may increase ahead of F&O expiry...," Vinod Nair, Head of Research, Geojit Financial Services Ltd, said. Last Wednesday, PNB said it had detected a fraud in which diamond jewellery designer Nirav Modi allegedly acquired fraudulent letters of undertaking (LoUs) from one of its branches for overseas credit from other Indian lenders, and the matter is being probed by the CBI and the Enforcement Directorate, among other agencies. Shares of Punjab National Bank (PNB) fell about 8 per cent, extending the decline for a fourth straight session, following the Rs 11,400-crore fraud at its Brady Road branch, Mumbai. The stock has fallen nearly 31 per cent in four straight sessions since the bank detected the fraud. Meanwhile, foreign portfolio investors (FPIs) continued selling on domestic bourses. On net basis, they sold shares worth Rs 1,065.99 crore, while domestic institutional investors (DIIs) made purchases to the tune of Rs 1,127.78 crore on Friday, provisional data showed. Intra-day, shares of UCO Bank plunged 4.58 per cent, followed by Union Bank of India 7.19 per cent, Allahabad Bank 6.30 per cent, Bank of Baroda 5.48 per cent, Syndicate Bank 6.45 per cent and Bank of Maharashtra 6.79 per cent and Corporation Bank 3.17 per cent. Among others, State Bank of India lost 1.51 per cent, Federal Bank 2.61 per cent, Indusind Bank 1.68 per cent, ICICI Bank 0.39 per cent and HDFC Bank 0.27 per cent. In the Sensex components, after Tata Steel, Asian Paint emerged as the second biggest loser with 2.77 per cent loss. Other laggards include, Dr Reddy's, Adani Ports, L&T, M&M, Sun Pharma, Bajaj Auto, IndusInd Bank, Bharti Airtel, Hindustan Unilever, Maruti Suzuki, ITC Ltd, Hero MotoCorp, ONGC, Tata Motors, Wipro, Power Grid, TCS, ICICI Bank and HDFC Bank, falling up to 2.75 per cent. Bucking overall general trend, shares of Bhushan Steel climbed 19.82 per cent on reports that the company has got a takeover offers from Tata Steel. Sectorwise, the BSE metal index fell by 1.60 per cent, followed by capital goods 1.56 per cent, PSU 1.38 per cent, realty 1.12 per cent, infrastructure 1.12 per cent, auto 1.11 per cent, healthcare 1.10 per cent, oil and gas 1.01 per cent, power 0.99 per cent, FMCG 0.91 per cent and bankex 0.57 per cent. The broader markets too depicted a weak trend with the mid-cap index falling by 1.05 per cent, while small-cap index ended 0.99 per cent as investors engaged in offloading their bets. Globally, in the Asian region, Japan's Nikkei rose 1.97 per cent, while markets in Hong Kong and China remained shut today on account of a public holiday. European markets were higher in their early deals.