Sensex, Nifty snap 4-day winning streak as bank stocks slump

NEW DELHI: Heavy losses in bank and financial stocks weighed on domestic bourses on Thursday, as benchmark indices ended on a negative note, after briefly touching all-time high levels in the early trade, ahead of another market holiday on Friday.

Markets are shut tomorrow on account of Good Friday.

Sentiment took a hit after debt-ridden Jet Airways was forced to halt all operations on Wednesday due to lack of funds. Banks led by State Bank of India have an exposure of over Rs 8,000 crore to the airline. The pressure on Jet's lenders -- SBI and PNB -- rubbed off on the entire pack. Shares of Jet Airways ended 32 per cent lower.

Although oil prices slipped on Thursday, they remained above the $71 mark. Meanwhile, Asian and European markets too traded on a lackluster note, after weak manufacturing surveys from Asia and Europe stoked fears of a slowdown in global growth.

BSE barometer Sensex slipped 135 points or 0.34 per cent to 39,140 with 23 constituents in the red. Meanwhile, NSE Nifty settled at 11,753, down 34 points or 0.29 per cent.

For every stock that rose today, two declined, BSE's advance-decline ratio showed.

Market at a glance
Oil-to-telecom behemoth Reliance Industries' gains of 2.79 per cent were the highest from the Sensex pack. The scrip gained amid reports that it is considering selling as much as 25 per cent stake in its refinery business to Saudi Aramco. The company will report its March quarter numbers later in the day.

YES Bank, meanwhile, shed the most in the 30-pack index. The scrip closed 4.18 per cent lower.

FII-favourite HDFC twins were the biggest drags.

The selloff in midcaps and smallcaps was steeper than the benchmark Sensex. The BSE Midcap declined 0.89 per cent and BSE Smallcap 0.99 per cent.

As many as 17 out of 19 sectors on the BSE ended in the red with Realty leading the loser brigade. BSE Energy was the best performing index, rising 1.93 per cent.

Factors

• Weak global cues

Global shares erased this week's gains on Thursday after weak manufacturing surveys from Asia and Europe stoked fears of a slowdown in global growth, adding to profit taking ahead of the long Easter weekend. After a subdued open, European markets fell further after French and German surveys of purchasing managers in the manufacturing sector for April showed activity continuing to contract.

Germany's DAX more than doubled losses on the day to trade 0.3 percent lower after the release of the German survey, while the pan-European STOXX 600 index was down 0.2 percent, Reuters reported.

• Selloff in bank stocks

Jet's operations came to a halt which led to a selloff in bank stocks. SBI-led consortium of banks have an exposure of Rs 8,000 crore against the airline. The pressure on few select bank stocks had an impact on the entire sector. The Nifty PSU Bank index fell 2.06 per cent, the private bank index 1.03 per cent.

• Oil above $71/barrel

Oil prices eased on Thursday, although a decline in US inventories, ongoing supply cuts from Opec and its allies, and US sanctions on Venezuela and Iran all limited losses. Brent crude futures were at $71.49 a barrel at 0943 GMT, down 13 cents from their last close and further away from Wednesday's five-month high of $72.27 a barrel.

Expert Take
Investors resorted to mild profit booking post the recent rally given truncated week on account of extended holidays and mixed global cues. Investor turned cautious ahead announcement of results from key index heavyweights including large corporate banks. Consolidation was broad-based with PSU banks and metals underperforming. Despite mixed flows from DIIs, downside was capped by positive flows from FIIs given good start to Q4 results
- Vinod Nair, Head of Research, Geojit Financial Services