Sensex down 2.6%, banking stocks under pressure

All the banking stocks rode downwards, as Moody’s downgraded the banking sector’s outlook from ‘Stable’ to ‘Negative’, mainly due to asset quality. SBI, the country’s largest bank, reported a 12.4% rise in its Net Profits, beating the market’s expectations. However, the rise in its non-performing assets has underlined the concerns raised by the credit rating agency. The stock closed down by 6.76% to 1862.

Glenmark and Ranbaxy also plunged down, as both companies reported foreign currency losses. Lupin, which reported its quarterly numbers, could not get support on the bourses due to the global cues.

Amongst the sectoral indices, only FMCG gained by more than 1%. IT and Teck were also marginally up. All the other indices closed in the red.

Amongst the Sensex stocks, the gainers included Hindustan Unilever, Wipro, TCS, Hero MotoCorp, ITC and HDFC, while all other stocks closed in the red. SBI was amongst the biggest losers, and dropped 135 points or 6.76% to 1862.50. In other stocks, United Spirits and Ashok Leyland gained by more than 3.5% each. Indian Oil Corporation lost by 3.73%, as the company reported Net Losses of Rs 7486 cr in Q2 FY12. All in all, it was a very bad day for investors.

The BSE clocked a turnover of Rs 2565 cr, higher than Rs 1984.53 cr as on 8rd November, 2011. The market breadth, which indicates the overall health of the market, was negative. Out of a total of 3304 stocks traded, 2158 stocks declined, 1042 advanced and 104 stocks remained unchanged.

In conclusion, we expect that this whole week to remain volatile. The European debt crisis, coupled with the worries over the banking sector, has hurt investor sentiment. The Inflation and IIP data is also awaited this week, which may provide vital clues for the market. The stock market remains closed tomorrow, 10 November, 2011, to mark Gurunanak Jayanti.