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Market Wrap: Bank stocks drag Sensex 318 points down, Nifty below 11,600; YES Bank tanks 13%

BusinessToday.In     July 18, 2019

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Market erased gains of last two sessions on Thursday with the Indian equity benchmarks, BSE Sensex and NSE Nifty, falling over 0.75% each. Sensex gave up 38,000 and Nifty was back below 11,600 level by the closing bell.

BSE S&P Sensex ended the day at 38,897, down 318 points and NSE Nifty50 closed lower by 90 points down at 11,596.  

"Global central banks including RBI are cutting their rates to support the economy, however markets are not yet convinced given the weak demand scenario, extension in trade war and lack of revival in corporate earnings. FII's are on a risk-off mode, while domestic mutual funds are providing marginal support in the market,"  quoted Mr. Vinod Nair, Head of Research, Geojit Financial Services Ltd, while commenting over the market highlights of the day.

Sectorally, except Financial Services and Media stocks, all the other indices traded lower, with highest decline recorded in the PSU banks which closed down 3%, followed by a bearish trend in CPSE, PSE, Auto and Metal stocks, declining over 2.50% each.

In major stock news, shares of private-sector lender Yes Bank fell as much as 19.6% to a fresh 52-week low after the private lender announced a 91% fall in its net profit, prompting brokerages including Jefferies and JP Morgan to slash their price targets on the stock.

Mindtree stock price plunged 10.6% after the IT services firm  posted a 41% drop in quarterly net profit, that later led brokerage firms Kotak Institutional Equities & BNP Paribas to downgrade the outlook.

Despite several analysts calling Wipro's numbers weak or disappointing, the shares of IT Major rose 3.3% after recording 13% rise in profit.

Moreover, Dainik Bhaskar Corp closed nearly 3% up with improved EBITDA margin YoY and Colgate ended 3% higher after reporting Q1 earnings in-line with estimates.

CARE Ratings shares fell 5.1%, their sharpest intraday drop in over 10 weeks, after the rating agency sent Chief Executive Officer Rajesh Mokashi on leave after the company had examined an anonymous complaint against him sent to the SEBI.

Meanwhile, Punjab & Sind Bank became the third Indian lender to report fraud against Bhushan Power & Steel, with its shares falling 6.4% lower.

Torrent Pharma stock fell over 6% intraday after the US drug regulator classified the inspection conducted at its Dahej facility in March, 2019 as Official Action Initiated (OAI).

At the interbank forex market, Indian rupee opened strong and later appreciated to 68.95 against the US dollar. Although Foreign fund outflows and cautious opening in domestic equities weighed on the local unit, weakened dollar index, that fell 0.14% to 97.09, supported the domestic currency.

Broader Asian markets were also under pressure after Wall Street stocks dropped amid renewed trade tensions between the US and China, which could hurt corporate earnings. Nikkei and Hong Kong Index declined 1% and 0.50%, SGX Nifty traded down by 15 points.

Meanwhile, Brent crude, the global benchmark, was trading at 63.84 per barrel higher by 0.29 per cent. Brent Crude production was disrupted last week as half of daily crude production in the Gulf of Mexico remained offline due to the first major storm, amid weak oil supply drawdown in US crude stockpiles last week.

Edited by Rupa Burman Roy

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