Stocks in financial sectors, including banks and non-bank financial corporations (NBFCs), were under pressure, falling as much as 24% on the National Stock Exchange (NSE) on Monday, in anticipation of slower growth due to concerns about the coronavirus.
at 3:00 p.m. The Nifty Bank, Nifty Financial Services and Nifty Private Bank indices are down 8.3% to 9%, compared to 7.8% for the Nifty 50 index. However, the Nifty PSU Bank index was down 5. 5% compared to the NSE.
RBL Bank fell 24% to Rs 158, its lowest level since August 31, 2016. The stock of private sector lenders slipped 30% as the bank’s valuations could remain under pressure due to emerging tensions. in the middle of the year. corporate space, coupled with the bank’s relatively high exposure to risky assets.
The fall comes despite the bank’s clarification that it is “financially sound and well capitalized”. In the past two months, the stock has plunged 54% from the Rs 346 level, against a 23% drop in the Nifty 50 index.
Among other counters, IndusInd Bank slipped 18% to Rs 656 on the NSE in intraday trading on Monday, falling 52% in the past two months. The action hit a 52 week low at Rs 551 on Friday March 13 on the NSE in intraday trading.
ICICI Bank, IDFC First Bank, and Axis Bank fell 10-11 percent, while Housing Development Finance Corporation (HDFC), Bajaj Finance, State Bank of India (SBI), Federal Bank, and Power Finance Corporation fell 8 percent and 9 percent on the NSE.
Analysts at JM Financial Institutional Securities expect the sector’s earnings trajectory to moderate due to weaker balance sheet growth, which is usually accompanied by pressure on net interest margins ( NIM).
“We continue to favor large banks with better economies of scale, strong liability franchises and less exposure to the weaknesses of medium-sized enterprises and small and medium-sized enterprises (SMEs),” the brokerage firm said in a statement. sectorial update.
Meanwhile, the Reserve Bank of India is expected to organize a media interaction later today. The central bank is generally expected to cut rates and announce measures to boost sentiment.