Global headwinds continued to hit Indian equities for the second consecutive session on Thursday as the benchmark Sensex and Nifty lost more than 1% each with investors reeling under concerns of an economic slowdown.
The 30-share Sensex lost 377.81 points or 1.05% to close at 35,513.71. The broader Nifty ended the day at 10,672.25, down 120.25 points or 1.11%.
The weak undertone of the market was further corroborated by the fact that over 1,650 stocks lost ground on the BSE, as against 921 gainers.
Bank of Baroda, Dena Bank and Vijaya Bank were in the limelight after the swap ratio was announced on Wednesday.
Dena Bank plunges
While shares of Bank of Baroda remained unchanged, Vijaya Bank and Dena Bank lost 7.25% and 19.78% respectively.
“Prima facie, valuations for both Dena Bank and Vijaya Bank have been taken at a discount, which makes it advantageous for BoB shareholders,” said Lalitabh Shrivastawa, AVP – Research, Sharekhan.
“However, we believe the share swap discount is done to either sweeten the deal for better-run banks or in anticipation of higher clean up in Dena Bank, which would, therefore, not upset the asset quality and earnings picture of the combined entity meaningfully,” he added.
Interestingly, while equities across the world fell on Wednesday after China reported a fall in its manufacturing activity, Thursday saw the concerns only grow bigger with Apple cutting its revenue expectations for the first time in 16 years on account of the slowdown in China.
The cut in guidance by the iPhone maker led to most Asian and European markets witnessing further selling pressure with the benchmarks of Japan, Hong Kong, Taiwan, South Korea, France, the U.K. and Germany losing ground. Technology stocks across the globe also witnessed declines on Thursday on the back of lower projections by Apple Inc., the world’s largest information technology company in terms of revenue.
Back in India, concerns related to the fiscal impact of the proposed package for farmers also acted as a catalyst in dampening investor sentiments.
The Sensex pack saw stocks such as M&M, ONGC, Vedanta, Tata Steel, L&T, HDFC and NTPC all losing more than 2% each.
Jet loses 7%
Jet Airways (India), which saw a rating downgrade by ICRA on Wednesday due to missed payments, saw its share price fall nearly 7% or ₹16.90 to close at ₹246.85.
The rupee also weakened for the second straight session, slipping 2 paise to 70.20 against the U.S. dollar.