Markets fall for the second day as the SC ruling triggers the sale of bank shares
MUMBAI: Markets spiraled down for the second consecutive day on Friday, as bank shares collapsed after the Supreme Court noted that telecommunications companies did not comply with their order to pay Rs 1.47 lakh crore in legal fees.
BSE of 30 shares sensex It fell 202.05 points or 0.49 percent to end at 41,257.74, with 22 of its components closing at a loss.
The broader NSE NSE lost 61.20 points or 0.50 percent to settle at 12,113.50 when banks, cars, consumer goods (FMCG) and energy meters receded.
The Supreme Court on Friday ordered the main levels of telecommunications companies to explain why they should not take contempt measures against them for breach of their order to pay adjusted gross income (AGR) fees of Rs 1.47 lakh crore to the department Telecommunications
The order raised concerns about the exposure of banks to telecommunications companies affected by the AGR, mainly Vodafone Idea, which reported a loss of more than Rs 6,000 million in the quarter from October to December.
IndusInd Bank was the top loser in the sensex pack, dropping 4.38 per cent, followed by PowerGrid, SBI, Hero MotoCorp and NTPC.
On the other hand, Bharti Airtel was the main winner, with 4.69 percent, and analysts said the Indian telecommunications sector could become a duopoly.
The idea of Vodafone, which contemplates statutory quotas worth Rs 53,000 crore, collapsed 23.21 percent.
Bank shares will be under pressure due to high inflation and RBI is unlikely to reduce rates in the short term. The Indian market is affected due to the fall in the world market due to the increase in coronavirus cases, said Vinod Nair, head of research at Geojit. Financial services.
Automotive shares sensitive to rates fell as official data showed that wholesale inflation rose to 3.1 percent in January, further reducing the prospects for a rate cut by RBI.
Hero MotoCorp fell 2.24 percent, Mahindra and Mahindra 1.91 percent and Maruti 1.24 percent.
The FMCG's important ITC fell 1.98 percent and HUL by 1.20 percent due to concerns about rising costs due to inflation rebound.
HCL Tech rose 1.42 per cent, ICICI Bank 0.9 per cent, RIL 0.86 per cent and Tech Mahindra by 0.72 per cent, limiting the fall in the sensex.
On a weekly basis, the sensex climbed 115.89 points or 0.28 per cent, while the Nifty earned 15.15 points or 0.12 per cent.
Globally, Asian markets staggered under the threat of the coronavirus after a dramatic increase in the number of deaths and new cases fueled the suspicion that China could be hiding the true scale of the epidemic.
Tokyo's Nikkei 225 index closed 0.59 percent lower, but Shanghai recovered from initial losses to end 0.38 percent.
The London FTSE 100 fell 0.42 percent in opening trade, while the Paris CAC 40 index lost 0.19 percent.