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Indian stock market falls sharply due to NBFCs' default risk, high oil prices

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.

Accordingly, the wider NSE Nifty50 closed below the 11,000 points-mark, down 175.70 points or 1.58 percent at 10,967.40 points, from its previous close of 11,143.10 points.

Similarly, the S&P BSE Sensex closed in the red. It opened at 36,924.72 points, closed at 36,305.02 points, lower by 536.58 points or 1.46 percent from the previous close of 36,841.60 points.

The S&P BSE Sensex touched a high of 36,945.50 points and a low of 36,216.95 points during the day's trade.

"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.

"Major Asian markets have closed on a negative note, barring the Straits Times index. European indices like FTSE 100, DAX and CAC 40 are trading in the red."

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."

"At the same time consolidation in Emerging Markets, continued increase in oil prices and high valuation further aggravated the anxiety."

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.

"Broad market indices like the BSE Mid Cap and Small Cap indices lost more, thereby underperforming the main indices. Market breadth was negative on the BSE/NSE." Jasani said.

On the currency front, the Indian rupee closed at 72.63 per US dollar, declining 43 paise from its previous close of 72.20 per greenback.

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.

Shares of TCS closed at Rs 2,198.70 per share, higher by Rs 94.90 or 4.51 percent from its previous close.

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.



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