Indian stocks fell more than 1% for a third consecutive session, pushing indices to their lowest since May 2014 as state-run lenders were hit hard by a slew of earnings that showed a spike in bad loans and provisions for sour debt. Photo: Hindustan Times
Indian stocks fell more than 1% for a third consecutive session, pushing indices to their lowest since May 2014 as state-run lenders were hit hard by a slew of earnings that showed a spike in bad loans and provisions for sour debt. Photo: Hindustan Times

Sensex, Nifty close at May 2014 lows as shares of state-owned banks slump

The Sensex closes 1.09%, or 262.08 points, down at 23,758.90, while the Nifty closes 1.13%, or 82.50 points lower, at 7,215.70

Mumbai: Indian stocks fell more than 1% for a third consecutive session on Wednesday, pushing indices to their lowest since May 2014 as state-run lenders were hit hard by a slew of earnings that showed a spike in bad loans and provisions for sour debt.

The S&P BSE Sensex closed 1.09%, or 262.08 points, down at 23,758.90, its lowest level since May 2014 on Wednesday. Among banks, State Bank of India (SBI) led the losses ahead of its financial results that are expected to disappoint just as other major state-run banks did this quarter.

Four state-run banks reported a spike in bad loans and provisions for sour debt on Tuesday after a clean-up exercise ordered by their regulator, sending three of them to net losses for the fiscal third quarter.

Traders say global slowdown and China worries have been a drag, but disappointing earnings especially from state-run banks have made things gloomy for domestic markets.

“Earnings season hasn’t been robust so far. Global uncertainties, China slowdown are making things worse for us," said Jagannadham Thunuguntla, head of fundamental research at Karvy Group.

The broader Nifty ended 1.13%, or 82.50 points lower, at 7,215.70 after trading at levels last seen when Prime Minister Narendra Modi was elected. The index is already down 3.7% for the week, heading for its biggest weekly fall since a 4.5% fall in the first week of the year.

Punjab National Bank lost 8.99% as the fourth largest state-run lender reported a 93% slump in profits and brokerages took a grim view.

BSE Metal index lost 0.07% as London copper slipped towards its lowest level in a fortnight as holidays in top consumer China entered a third day, dampening demand, while global growth fears dragged on prices.

Cement major ACC Ltd, a Holcim group company, fell ahead of reporting quarterly results that are expected to lag street estimates, as per Thomson Reuters Starmine SmartEstimates.

Cairn India Ltd lost 5.84% as Brent crude fell 8% to $30/bbl overnight after weak demand forecasts from the US government and the western world’s energy watchdog. Reuters

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