PSU Banks Drag Markets; Sensex Slumps 430 Points To Close At 33,317 Level, Nifty Settles Below 10,250

As selling pressure intensified in late afternoon trading, the domestic equity markets slumped, led by PSU bank stocks in the last half an hour of trading on Tuesday. The S&P BSE Sensex closed 429.58 points or 1.27 per cent lower at 33,317.20 and the broader Nifty50 index ended at 10,249.25 level with a loss of 109.60 points or 1.06 per cent. Experts attributed the sudden fall in the afternoon session to top bank executives being summoned in relation to the Punjab National Bank-Nirav Modi fraud case.  ICICI Bank chief Chanda Kochhar and Axis Bank's Shikha Sharma have been summoned by the anti-fraud agency, SFIO, for questioning as part of the ongoing investigation into alleged loans extended to Mehul Choksi's Gitanjali Group and Nirav Modi's by a bank consortium.

"During the entire first half, Nifty consolidated around the 10400 mark; however, the second half turned out to be extremely brutal as we witnessed a complete nosedive to fall more than 200 points from morning high...Going ahead, any bounce back towards 10,300 - 10,360 would be seen as a selling opportunity,"  said Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking.

The top drags in the 30-share Sensex pack were Sun Pharma (down 2.95 per cent), State Bank of India (down 2.77 per cent),  ICICI Bank (down 2.64 per cent), Mahindra & Mahindra (down 2.52 per cent) and Maruti Suzuki (down 2.05 per cent). However, IndusInd Bank (up 1.21 per cent), Tata Steel (up 0.79 per cent), Hero MotoCorp (up 0.35 per cent) and Coal India (up 0.31 per cent), were the only gainers in the Sensex.

Among the sectoral indices, the BSE Telecom index was the biggest loser led by Tejas Networks (down 5.18 per cent), Reliance Communications (down 5.05 per cent), and GTL Infra (down 4.07 per cent). On the Nifty, the Nifty PSU Bank index lost 2.87 per cent to end at 2,936.35 points.

The banking index is now poised for further weakness towards 24,200 - 24,000 levels, said Mr Chavan. "It would be very interesting to see how PSU banking basket behaves as the 'Nifty PSU bank' index has closed around its major support level of 2928. Hence, traders need to keep a close eye on this development as well," he added.

Meanwhile in Europe, Germany's DAX was trading at 12,218.80, with a gain of 127.93 points and France's CAC 40 was at 5,202.14 with a gain of 34.92 points.

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In Asia, Japan's Nikkei 225 closed at 21,417.76 with a gain of 375.67 points, China's Shanghai Composite  Index ended at 3,289.64 up 32.72 points and Hong Kong's Hang Seng ended 624.34 points higher at 30,510.73 points.

Overnight, on the Wall Street, the Dow Jones Industrial Average rose 336.7 points, or 1.37 per cent, to 24,874.76, the S&P 500 gained 1.10 per cent while the Nasdaq Composite added 1 per cent.