New Delhi: It was a nerve-wracking day for investors. The benchmark index Sensex settled 279 points lower at 36,841, not before a nearly 1,500-point swing. The Sensex fell as much 1,127 points at the day’s low in afternoon trade after panic selling emerged in housing finance stocks, led by DHFL. The afternoon bloodbath in the market is a complete reversal of how the trading started on Dalal Street today. The Sensex opened on a positive note and rose as much as 368 points at the day’s high, tracking higher global markets. The Nifty settled at 11,143, down 0.8%.

10 things to know about the stock market selloff today:

1) According to reports, rumours of default by a large NBFC on its debt obligations led to the panic-selling in the markets. Krish Subramanyam, co-head equity advisor at Altamount Capital, said rumours about one group “spilled over to other NBFCs (non-banking finance companies)".

2) “It is happening to all HFCs (housing finance companies), and not just us. I fail to understand why," Kapil Wadhavan, chairman and managing director of DHFL, told Mint.

3) “This is unprecedented. We have not delayed or defaulted on any payment. We have sufficient cash reserves. It seems to be the outcome of sentiment. We are communicating with all stakeholders, including investors," said Wadhavan.

4) DHFL shares ended 42% lower at 351, recovering from a nearly 60% intraday drop. Other housing finance companies also suffered sharp losses. Indiabulls Housing Finance shares fell 8% while LIC Housing Finance dropped 5%.

5) Sanjiv Bhasin of India Infoline said liquidity issues being faced by Infrastructure Leasing & Finance Services Ltd (IL&FS) is keeping the market nervous.

6) Fear of tightness in the debt market is also making investors jittery, he added.

7) Moody’s Investors Service on Wednesday said rising liquidity issues in IL&FS, which has recently defaulted on debt repayment of 100 crore, are credit negative for Indian banks.

8) This followed a series of defaults starting August 28, when ILFS Financial Services, one of IL&FS subsidiaries, delayed repayment of some of its commercial paper obligations.

9) Private sector lender Yes Bank Ltd’s shares tumbled 28%, after the RBI denied CEO Rana Kapoor an extension. The Reserve Bank of India (RBI) said late on Wednesday Kapoor can serve as the lender’s chief executive only till January 31 next year. It did not give a reason. Indian stock markets were closed on Thursday for a holiday.

10) The breadth of the market was weak, with nearly four stocks declining for every stock that advanced on the BSE. The BSE midcap index, which at day’s low had fallen nearly 7%, also recovered to close 1.7% lower.

With Agency Inputs

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