Sensex, Nifty shaky on earnings woes; banks bleed on NPA scare

Moneycontrol Bureau  11:45 am Results boardroam: India's third largest private sector lender Axis Bank reported a 83.1 percent fall in profit in the second quarter to Rs 319 crore on back of bad loans clean-up. Provisions rose to Rs 3,623 crore, more than 5-fold increase in comparison to year-ago. Over the last six quarters, not much improvement was seen on the operating side, said Jairam Sridharan, CFO of Axis adding that there now is more uncertainty over eventual number of slippages. The bank had guided for 60 percent of its watch list turning into non-performing loans, which could be higher going ahead. Sridharan said that slippages in Q2 were likely at their peak. Addition of slippages will continue to be higher in coming quarters for Axis. FY17, he said, will be the peak of credit cycle for the bank.11:30 am India on a fast track: Underlining that India needs "transformative reforms" to boost its economy, the World Bank said the country has witnessed "fast-paced" reforms in past two years with the government encouraging digitisation, streamlining electricity supply and supporting manufacturing. "The country has embarked on a fast-paced reform path," the international lender's annual report on Ease of Doing Business 2017 Report said in a special India-specific box. The report "acknowledges several substantial improvements". Titled 'India has embarked on an ambitious reform path', the report said that the current Indian government was elected in 2014 on a platform of increasing job creation, mostly through encouraging investment in the manufacturing sector.Don't miss: ITC Q2 profit may grow 10%, cigarette volume growth seen at 3-4%

The market is reeling under pressure as banks continue to grapple with asset worries in September quarter. The Sensex is down 227.53 points or 0.8 percent at 27863.89 and the Nifty is down 55 points or 0.6 percent at 8636.30. About 1277 shares have advanced, 1015 shares declined, and 178 shares are unchanged.

Bankex is down over 1 percent dragged by Axis Bank (down 8 percent) and ICICI Bank (down 3 percent). Other losers in the Sensex include are Tata Motors, Asian Paints and Adani Ports. Bharti, Hero, Bajaj Auto, Maruti and M&M are gainers in the Sensex.

Gold prices extended gains after touching nearly 3-week highs in the previous session, buoyed by rising physical demand ahead of India's late-October festival season.

Gold is a traditional gift during two of the most important Hindu festivals, Dhanteras and Diwali, which will be celebrated at the end of the month.

The European Central Bank is aware of the growing costs to the financial sector of its ultra-loose monetary policy and would rather not have to keep negative interest rates for too long, ECB President Mario Draghi said on Tuesday.