Home > market > stock-market-news > Sensex, Nifty decline over 1% dragged by PSU bank stocks

Mumbai: Indian markets declined over 1% on Monday led by fall in public sector banks as investor sentiment remained weak after the Central Bureau of Investigation (CBI) widened investigation in the $1.8 billion Punjab National Bank (PNB) fraud.

The 30-share Sensex shed 1.18%, or 400.29 points, to trade at 33,610.47, while National Stock Exchange’s 50-share Nifty dropped 1.21%, or 126 points, at 10,326.30. Year to date, the key indices are down 1.29% and 1.92%, respectively.

Investors were cautious after more banks announced exposure to the PNB scam. UCO Bank on Saturday said it has an exposure of $411.82 million. Earlier, State Bank of India and Allahabad Bank disclosed Rs1,360 crore and Rs2,000 crore exposure to PNB.

“We wait for dust to settle on PSU Banks’ stance," said Credit Suisse in a 19 February report.

Among public sector banks, Allahabad Bank fell 11%, Union Bank of India declined 10%, Punjab National Bank slumped 9%, Syndicate Bank and UCO Bank lost 9% each, and Bank of India and State Bank of India were down 7% and 5%, respectively. Nifty PSU Bank Index declined 5.6%.

Earlier, Mint reported that the Central Vigilance Commission summoned senior officials of PNB on alleged vigilance lapses which led to a loss of Rs11,400 crore to the lender at the hands of Nirav Modi- and Mehul Choksi-owned firms.

“Banks (especially PSU banks) have been grappling with structural asset quality issues, but over last few days risks have got exacerbated following fraud reported by PNB... at this juncture, investigating agencies have been roped in and it will take some time to ascertain the financial impact on banking system," said Edelweiss Securities in a note to its investors.

Meanwhile, Tata Steel Ltd lost 6.5% after the company emerged as the top bidder for Bhushan Steel Ltd with a bid of Rs35,000 crore.

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