Markets Live: Nifty tests 5300; SBI disappoints with net NPA figures

The benchmark index Nifty was trading perilously close to 5300 mark. The market was dragged lower primarily by SBI’s quarterly results announcement. Bank Nifty also lost close to 1%.

State Bank of India, the country's largest lender, beat street expectations as its net profit surged for the second consecutive quarter on strong loan growth, but a rise in bad loans pulled down its shares.

SBI's net profit more than doubled to Rs 3752 crore from Rs 1584 crore a year earlier. Analysts, on average, had expected a net profit of Rs 3617 crore.

Its non-performing loans rose to nearly 5% at end-June compared with 3.5% a year earlier but provisions, or the funds set aside for bad loans and contingencies, were down 41% to Rs 2560 crore.

Earlier, UBS downgraded State Bank of India to 'sell' from 'buy', saying a weak monsoon would add to its "already high" non-performing loans, while expecting margins to decline due to rising cost of funds and potential cuts in the lending rate.

European markets open lower after Asian shares snapped a four-day rally on Friday and extended losses as China's July trade data fell far short of expectations, casting doubts on whether the sputtering global economy will regain traction any time soon.

Top losers on the Nifty were SBI, Ranbaxy Labs, Tata Motors, IDFC and Reliance Infra. BPCL, TCS, Maruti Suzuki, Cairn India and ITC were top gainers.

PSU banks like Bank of India, Bank of Baroda, Union Bank and Canara Bank were also bleeding after dismal SBI results. Also concerns of a looming drought would increase defaults of farm loans, leading to higher provisioning in coming quarters.

Results announced so far today

GMR Infra reports consolidated net loss of Rs 94.3 crore against Rs 66.7 crore, last year. The consolidated revenue stood at Rs 2,562 crore comapred to Rs 2089.8 crore.

IFCI records negative growth on bottomline front. The company reports PAT of Rs 93.6 crore versus Rs 132.1 crore in the same period last year.