At the close of market hours, the Sensex closed down 279.62 points or 0.75% at 36841.60, while the Nifty ended lower by 91.30 points or 0.81% at 11143.10.
A largely volatile day has come to a close, with indices ending the day on a negative note. However, they are off the day’s low points. The Nifty has managed to give up 11,200 in today’s trade. The Sensex has closed over 200 points lower.
There was panic selling in the market as non-banking financial companies (NBFCs), led by a huge drop in the shares of Dewan Housing Finance (DHFL), dragged financial stocks. The negativity spilled over to other marquee names such as Indiabulls Housing Finance, Gruh Finance and LIC Housing Finance, among others.
What particularly transpired in the trade today was selling activity in the bond markets. DSP Mutual Fund is believed to have sold DHFL paper at 11 percent discount in a bid to make provisions for its exposure to IL&FS’ paper. This triggered a selloff in the DHFL stock, which plunged over 50 percent, halving the share value in just a few hours. There was a knee-jerk reaction among other housing finance companies (HFCs) as well as other NBFC names too.
As a result, in the afternoon, the equity market saw a huge plunge, with the Sensex falling over 1,000 points. The Nifty had managed to breach 11,000-mark as well. However, the managements of DHFL and Indiabulls Housing Finance tried to allay fears and said that there was no such instances in the company. The company reiterated this in an analysts’ call that was organized later.
Financials were buzzing in trade this morning as Yes Bank led the losers’ chart as investors reacted to RBI deciding to reduce Rana Kapoor’s term to January 2019.
The day began on a strong note as good global cues and stronger opening on the rupee boosted sentiment in D-Street. The Sensex had risen 300 points in intraday trade. But a sharp selloff in the afternoon, led by a 50 percent crash in Dewan Housing Finance’s shares as well as on Indiabulls Housing weighed big on the market.
At the close of market hours, the Sensex closed down 279.62 points or 0.75% at 36841.60, while the Nifty ended lower by 91.30 points or 0.81% at 11143.10. The market breadth is negative as 596 shares advanced, against a decline of 2,071 shares, while 155 shares were unchanged.
Shares of DHFL ended 45 percent lower, while top losers include Yes Bank, Kotak Mahindra Bank, and Indiabulls Housing Finance, while the gainers include ONGC, Wipro, Bharti Infratel and BPCL.
Stocks in News
Shares of Yes Bank fell 29 percent after Reserve Bank of India (RBI) cut the tenor of Rana Kapoor, chief executive and managing director, till January 31, 2019.
Shares of Dilip Buildcon added more than 3 percent after it was declared lowest bidder for metro rail project of Rs 228.96 crore.
Gravita India rose nearly 9 percent intraday but ended flat even as it expanded its production capacity of Chittoor plant.
Meanwhile, Jet Airways ended 6 percent lower after Income tax investigation department conducted survey on company’s premises.
State Bank of India (SBI) ended half a percent lower after it concluded the issuance of USD 650 Mio Green Senior Unsecured Fixed Rate Notes programme.
Asian markets were positive as investors took cues from positive handover from Wall Street. Nikkei 225 ended the week higher by 0.82 percent at 23,869.93.European markets were higher as investors shrugged off worries over the U.S.-China trade dispute. Stoxx 600 edged up 0.54 percent.