Sensex tanks 362 pts, Nifty slips below 11,400; key factors behind market’s pain – Economic Times, The Times of India

The domestic stock market continued to bleed on Tuesday with Sensex and Nifty falling nearly 2 per cent each. Rumors of more debt distress, muted auto sales and weak macro data weighed on the stocks.

Sensex plunged as much as 737. 44 points during the session to 37, 929. 89, while Nifty tanked up to 226. (points to) , 247 . 90.

However, benchmark indices recouped losses with the 30 – share Sensex ending the day at 38, 305. 41, down 362 points or 0. 94 per cent. Its NSE counterpart Nifty settled the day at 11, 365. 70, down 109 points or 0. 95 per cent.

Yes Bankwas the biggest index loser, tumbling over 22 per cent after its promoter entities sold a part of their stake in the company.

The rupee was also weak amid heavy selling in equity market, down 0. 28 per cent or (paise at) . 06.

The volatility index, India VIX surged 11. 54 per cent in the afternoon trade to hit 17 .7 level.

Here are the key factors that weighed onDalal Streettoday:

Banks bleed
Banking names crashed on Tuesday as Nifty Bank came down by 2. 44 per cent led by YES Bank that plummeted over 22 per cent.RBL Bankalso tumbled 18 per cent on NSE. ExceptHDFC Bank, all constituents of the index were trading in the red.

Rumors of more distressed names coming out weighed on the banks. Banking stocks fell on Monday as well on buzz of their exposure toIndiabullsGroup.

A Jefferies report said that bad loans could rise in the banking system. In a note Jefferies suggested that there is a divergence between the ratings and the debt repayment ability of companies.

YES Bank,Bank of Baroda, SBI,IndusInd Bankand RBL Bank are amongst the banks that are most prone to high risk emanating from Anil Dhirubhai Ambani Group (ADAG), Cox & Kings, CG Power, DHFL andEssar Shipping, it said.

RBI said the banking system is safe and stable and asked bank customers not to panic on the rumors doing the rounds.

“There are rumors in some locations about certain banks including cooperative banks, resulting in anxiety among the depositors. RBI would like to assure the general public that Indian banking system is safe and stable and there is no need to panic on the basis of such rumors, “the central bank posted on its Twitter handle.

Weak macro data
India’s core infrastructure industries’ output declined for the first time in more than four years in August, reflecting weak demand in the economy. The index of eight core infrastructure industries, which comprises output of coal, crude oil, cement and electricity among others, fell 0.5 per cent in August. It had last declined in April 2015.

The core infrastructure sector constitutes two-fifths of total industrial production and the weakness will have negative impact on factory output, data for which is due next week.

Auto sales stay sluggish
Auto sales continued to slide in September. Sales for M&M declined 21 per cent, SML Isuzu ( (per cent), Eicher Motors ( (per cent), Ashok Leyland (27 per cent). This dampened the mood dragging Nifty Auto 0.7 per cent.

However, a couple of companies registered a growth in monthly sales, including Escorts (up 2.2 per cent) Atul Auto (4 per cent).

Maruti Suzuki stock price climbed 0.4 per cent to Rs 6, 745 despite the company reporting 24 per cent fall in sales.

Fitch forecasts more gloom
The sentiment on D-Street also took a hit after Fitch said global GDP growth will hit eight-year low in 2019. Fitch said the outlook for the global economy deteriorated significantly due to escalation in the US-China trade war. The rating agency said lower growth in China will prolong the slump in global trade and manufacturing, which will, in turn, continue to pressure eurozone expansion.