Stocks plunge despite RBI rate cut, financials under pressure
Mumbai (Maharashtra) [India], June 6 (ANI): Equity benchmark indices were dragged down by financial stocks in afternoon trade on Thursday even though the Reserve Bank of India (RBI) reduced repo rate by 25 basis points to 5.75 per cent in its second bi-monthly monetary policy meet of fiscal 2019-20.
ANI
Jun 06, 2019 16:14 IST
Mumbai (Maharashtra) [India], June 6 (ANI): Equity benchmark indices were dragged down by financial stocks in afternoon trade on Thursday even though the Reserve Bank of India (RBI) reduced repo rate by 25 basis points to 5.75 per cent in its second bi-monthly monetary policy meet of fiscal 2019-20.
The BSE S&P Sensex closed 554 points down at 39,529 while the Nifty 50 lost points to 11,844.
At the National Stock Exchange, all sectoral indices were in the red. Nifty PSU bank fell 4.9 per cent, private bank 2.3 per cent and financial service 2.3 per cent.
Shares of Eros International Media tumbled nearly 20 per cent after CARE rating agency cut its creditworthiness citing delays or likely defaults in serving debt availed from banks.
Stocks of home loan lender Dewan Housing Finance Corporation Ltd also fell as much as 15.86 per cent after rating agencies ICRA and Crisil slashed their outlook on the company's commercial paper programme.
Government-owned energy major GAIL slipped 11.5 per cent while Indiabulls Housing Finance was down 7.7 per cent.
IndusInd Bank closed 6.8 per cent lower, Yes Bank down 5.8 per cent, State Bank of India down 4.5 per cent and ICICI Bank down 1.7 per cent.
However, marginal gains were witnessed in Coal India, Hero MotorCorp, NTPC and Power Grid Corporation.
Many investors said the RBI's move to cut interest rates marginally is unlikely to stimulate demand in the near-term due to absence of quick resonance in financial market. While banks are struggling with high non-performing assets, non-banking finance companies are struggling with solvency issues leading to credit freeze, they said.
Meanwhile, Asian shares were mixed as investors feared a looming US trade war with Mexico which could further depress global growth. Japanese and Chinese shares dipped while they were flat in Hong Kong, a day after US stocks closed higher.
On late Wednesday, sentiment soured after a meeting between US and Mexican officials ended with scant sign of progress.
(ANI)
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