Indian stock market falls sharply due to NBFCs' default risk, high oil prices
Fears of major repayment defaults in the non-banking financial sector, along with rising crude oil prices and broadly negative global markets on trade protectionist measures, dragged the key Indian equity indices deep into the red on Monday.
"The weakness came on the back of weak global cues following renewed uncertainty over US-China trade relations," said Deepak Jasani, Head of Retail Research, HDFC Securities.
According to Vinod Nair, Head of Research, Geojit Financial Services: "This turmoil which was triggered last week by the housing and NBFC's continued to trouble the market as panic spread. In spite of assuring statements by key government and institutional leaders, the market was concerned about the near-term headwinds like quality & increased cost of funds along with tighter liquidity."
Sector-wise, an upward trend was seen in IT and TECK (technology, entertainment, and media) stocks along with slight gains in energy scrip, despite an all-round sell-off led by auto, banking, and finance counters.
The auto index was down 872.16 points, banking 679.92 points and finance lost 197.30 points during the day's trade. Finance stocks hold the most weight among all the sectors.
Investment-wise, provisional data with the exchanges showed that foreign institutional investors sold stocks worth Rs 523.94 crore and domestic institutional investors bought stocks worth Rs 1,527.67 crore.
In a major stock-wise development, the share price of Tata Consultancy Services (TCS) touched a record high of Rs 2,214.15 on the back of a weak rupee.
The other major Sensex gainers were: Coal India, up 2.10 percent at Rs 281.45; Infosys, up 1.56 percent at Rs 717.30; Reliance Industries, up 1.27 percent at Rs 1,232.30; and NTPC, up 0.57 percent at Rs 168.30 per share.
On the other hand, Sensex losers were: Mahindra and Mahindra, down 6.46 per cent at Rs 895.40; HDFC, down 6.22 per cent at Rs 1,721.05; IndusInd Bank down 4.94 per cent at Rs 1,674.65; Adani Ports, down 4.49 per cent at Rs 345.75 and Bharti Airtel, down 4 at Rs 357.50 per share.