The Sensex and Nifty ended lower in Friday’s trade amid weakness in banking stocks due the PNB fraud and absence of positive global cues.
While the Sensex closed 286 points lower to 34,010, Nifty fell 93 points to close at 10,452 points.
The Sensex rose nearly 211 points in early trade to hit an intra day high of 34,508 level. The index saw a continous slide through the day as the impact of Rs 11,400 crore fraud in Punjab National Bank was felt on other lenders who had exposure to these funds.
Bank stocks were among the top losers with BSE bankex falling 335 points or 1.17% to 28,396 level.
Bank Nifty too plunged 1.02% or 260 points to 25,163 level. Auto and capital goods indices too shed 414 pts (1.65%) and 258 points (1.33%) on the BSE.
SBI, which has been directly affected by such unauthorised transactions was the top Sensex loser falling 2.55% at 271 points. Reports said SBI had exposure of Rs 1,300 crore to the fraud. YES Bank (2.52%), ICICI Bank (2.31%) and Adani Ports (2.08%) were other major losers on the index.
“Movement is erratic in many shares… impact on PNB stock may be done, but if other banks have exposure to the same group, then it could become an issue,” said Jayant Manglik, President-Retail Distribution, Religare Broking.
Small cap and midcap indices led the decline falling 1.22% and1.20 percent each.
Market breadth was negative with 709 stocks closing higher against 2095 falling on the BSE. 114 stocks were unchanged.
The Punjab National Bank stock closed 2.10 percent lower at 125.65 level on BSE. During the last two trading sessions, the stock fell over 20% on disclosure of Rs 11,400 crore fraud by the lender.
Shares of Gitanjali Gems tanked another 20% after the detection of Punjab National Bank’s Rs 11,400-crore fraud. Gitanjali Gems is one of the companies charged by investigating agencies for colluding with Nirav Modi in carrying out the fraud. The stock closed 19.94% or 9.35 points to 37.55 level on BSE.
Global markets
The MSCI world index of stocks, which tracks shares in 47 countries, was up 0.4 percent after European bourses opened. After suffering its biggest weekly drop since August 2015 last week, this week’s recovery puts the index on track for its best weekly showing since early December 2011.
European shares were set to chalk up healthy weekly gains, snapping a three-week losing streak as earnings updates continued to impress, and volatility and jitters over rising inflation eased. Among country benchmarks, the UK’s FTSE was up 0.6 percent and Germany’s DAX .GDAXI added 0.8 percent, while Italy’s FTSE outperformed, up 1.2 percent.
Japan’s Nikkei rose 1.2 percent, with investors relieved to see the government appoint Bank of Japan Governor Haruhiko Kuroda for another term, suggesting the central bank will be in no rush to dial back its massive stimulus program.
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