The benchmark equity indices snapped their three-day winning streak on Wednesday driven by a fall in shares of non-banking financial companies (NBFCs) along with those of firms in interest rate-sensitive sectors such as automobiles and realty.
The 30-share Sensex, which touched an intraday high of 35,605.43, ended at 34,779.58, down 382.9 points or 1.09%. Shares of Yes Bank, Maruti Suzuki, Tata Motors, SBI, Hero Motocorp all lost more than 2% each. Yes Bank lost almost 7% after the RBI reiterated that the private sector lender should have a new head by February 1 as the term of the current MD and CEO Rana Kapoor ends on January 31. The Nifty of the National Stock Exchange closed at 10,453.05, down 1.24%.
Market participants said the fall was triggered by the credit downgrade of SuperTech Ltd., a real estate developer in Delhi, leading to concerns related to the exposure that some NBFCs might have to the company.
“Credit facilities of a large property developer in NCR region have been downgraded to default. Investors are concerned about its exposure mainly by NBFCs. Stocks of many financiers who had lent to this player were hammered,” said V.K. Sharma, head, private client group and capital markets group, HDFC Securities.
Indiabulls Housing Finance lost more than 13%, or ₹119.60, to close at ₹788.85. Further, DLF and Indiabulls Real Estate lost more than 8% each with the BSE Realty index shedding more than 3% to end the day as the worst performing sectoral index.
Meanwhile, foreign investors continued their selling spree with net sales of more than ₹20,000 crore in the current month. The rupee settled 13 paise lower at 73.61 against the dollar on Wednesday.
