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Last Updated : Aug 21, 2015 01:13 PM IST | Source: Moneycontrol.com

Nifty hovers around 8250 amid pressure; HUL up, HDFC drags

Pressure on banks continued as the Bank Nifty saw a cut of more than 2 percent. The PSU Bank Index also saw a cut of 3 percent as Morgan Stanley said it's time to sell state-owned banks. It is underweight on all PSU banks except Bank of Baroda where it expects a potential balance sheet clean-up given the new management.


Moneycontrol Bureau

12:55 pm Banks weakness:
With both the PSU banks and private banks under immense pressure in trade today, Vaibhav Agrawal, VP Research Banking, Angel Broking believes it could be due to worries of the rupee depreciating further.


Apart from the currency worry, PSU banks are also bogged down by asset quality pain. Going forward, he sees more pressure for the steel sector and with PSU banks having around 7-9 percent exposure to these stressed assets they would continue to remain under pressure.

12:35 pm Global Update:
China's Shanghai Composite closed at 3,507.74, down 4.3 percent today. The index crashed 11.5 percent for the week.

European markets have opened weak following steep fall in Asian and US indices. France's CAC plunged 1.5 percent and Britain's FTSE fell 1.2 percent. Germany's DAX declined 1.7 percent.

12:25 pm Interview:
Speaking on the competition payments banks may give to normal banks, Shyam Srinivasan MD & CEO at Federal Bank said focus on scalability and visibility going forward is necessary although there is no reason to feel threatened. He admits payment banks are likely to change dynamics of banking.

Meanwhile, he is very excited about the launch of selfie-account, which would be a convenient method for banking and urges customers to avail the facility.

Talking about the bank's e-credit facility, he said it meant for the existing customers and audiences so far have been captive. But going forward, the bank plans to open it to new-to-bank customers through online capability for wider base.

With regards to stress accounts, he said currently there are no issues The one which was under stress has already been recognised, he said.

12:00 pm Market Check


Equity benchmarks erased 2015 gains as global jitters dragged the market. The Sensex tanked 395.23 points or 1.43 percent to 27212.59 and the Nifty dropped 120.10 points or 1.43 percent to 8252.65. About 583 shares have advanced against 1861 shares declined on the Bombay Stock Exchange.

Close

Pressure on banks continued as the Bank Nifty saw a cut of more than 2 percent. The PSU Bank Index also saw a cut of 3 percent as Morgan Stanley said it's time to sell state-owned banks. It is underweight on all PSU banks except Bank of Baroda where it expects a potential balance sheet clean-up given the new management.


HDFC, Larsen & Toubro, HDFC Bank, ICICI Bank, Reliance Industries, Tata Motors, SBI, Bajaj Auto, Vedanta and Hero Motocorp were down 1.5-4 percent.


However, HUL rebounded with more than half a percent gain. Infosys rose nearly 1 percent in an otherwise weak market as the sharp fall in rupee and the launch of three new service offerings yesterday helped the stock outperform market.


The rupee weakened further, threatening to breach 66 against the greenback. The currency hit a fresh 2-year low of 65.82 a dollar (down 32 paise against dollar), depreciating in-line with global emerging market currencies.


It's a sea of red across Asian markets tracking weak cues from the US market and volatility in China after the manufacturing PMI slumped to a six-and-a-half-year low. Europe, too, is expected to plummet at the open as a new election in Greece spooked traders.



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First Published on Aug 21, 2015 12:00 pm
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