BackSensex closes 122 pts down as lenders fall after PNB’s bad debts climb
The Sensex closed down 0.42% at 29,000.14 points, while the Nifty shed 0.46% to end at 8,756.55 points
Premium
Mumbai: Indian stocks declined for a third day on Tuesday, led by lenders, after Punjab National Bank (PNB) reported an increase in bad debts and the Reserve Bank of India (RBI) kept interest rates unchanged.
RBI, in its sixth bi-monthly monetary policy review on Tuesday decided to keep policy rates unchanged at 7.75%, even as it moved to ease liquidity conditions by cutting the proportion of government bonds banks must hold. In a Bloomberg poll, 31 of the 41 analysts had expected rates to remain unchanged.
RBI is among at least 12 monetary authorities around the world to have eased policy this year. The slump in crude oil prices since June has pushed inflation below governor Raghuram Rajan’s 6% target, allowing him to focus on boosting expansion in Asia’s third-largest economy. India’s Union budget is due on 28 February.
The 30-share Sensex closed down 0.42%, or 122.13 points, at 29,000.14 points, while the National Stock Exchange’s broader 50-share Nifty shed 0.46%, or 40.85 points, to end at 8,756.55 points.
Among the gainers, Sesa Sterlite Ltd rose 6.23% to ₹ 210.55, Bharti Airtel Ltd added 3.42% to ₹ 371.85, while Reliance Industries Ltd (RIL) advanced 3.25% to ₹ 937.45.
Among the losers, Axis Bank Ltd fell 4.95% to ₹ 586.50, Tata Power Co. Ltd declined 4.12% to ₹ 87.30, while Bajaj Auto Ltd fell 3.74% to ₹ 2,260.10 after the company reported a 9% drop in its January total sales to 2.88 lakh units.
PNB tumbled the most in 16 months after its gross bad loan ratio widened to 5.97% in the three months ended December from 4.96%, sending a gauge of lenders to its biggest loss in two weeks. The BSE Bankex was the top sectoral loser, down 2.61%.
Shares of PNB shed 7.94% to ₹ 176.75 apiece.
The oil and gas index was the top gainer, up 1.99%.
Shares of other state-run banks also tumbled. Bank of India fell 4.59% to ₹ 260.85, Kotak Mahindra Bank Ltd 3.33% to ₹ 1,307.60, State Bank of India (SBI) 2.49% to ₹ 300.15 and Canara Bank Ltd 3.51% to ₹ 438.80.
Tata Motors Ltd rose 1.65% to ₹ 602.05. The company’s sales of passenger vehicles rose 19% to 13,047 units in January 2015 from 10,974 last January.
Upstream oil companies rose after brent crude rose to $55 a barrel on speculation that crude oil’s collapse to an almost six-year low will prompt producers to scale back output and reduce a glut. Cairn India Ltd rose 4.08% to ₹ 245.05 and Gail India Ltd rose 0.92% to ₹ 433.80.
Videocon Industries Ltd rose 8.79% to ₹ 172.1 after a consortium in which it is a member made the largest discovery of petroleum in this year in Brazil.
Bharat Forge Ltd rose 2.22% to ₹ 1,089.25 after it reported a 108.8% jump in its net profit to ₹ 196.3 crore as compared to ₹ 94 crore last year same quarter.
Religare Enterprises Ltd fell 0.19% to ₹ 370. The company narrowed its stand-alone losses to ₹ 18.06 crore in the third quarter ended December 2014 as against ₹ 74.74 crore last year.
So far in 2015, the Sensex has gained 6.3%, while foreign institutional investors have bought $2.88 billion from local equity markets and 3.72 billion from debt markets.
Bloomberg’s Rajhkumar K Shaaw contributed to this story
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
