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Supreme Court ruling triggers selling in banking stocks
Key indices decline for 2nd session; Sensex down 202 pts
Mumbai: The domestic markets spiralled lower for the second straight day on Friday as banking shares slumped after the Supreme Court (SC) took a strong note of telecos not complying with its order to pay Rs1.47 lakh crore in statutory dues. Banking, auto, FMCG and energy counters retreated.
The 30-share BSE Sensex fell by 202.05 points or 0.49 per cent to end at 41,257.74, with 22 of its constituents closing with losses. The broader NSE Nifty shed 61.20 points or 0.50 per cent to settle at 12,113.50 points.
The Supreme Court on Friday directed the top echelons of telecom firms to explain why contempt action should not be taken against them for non-compliance of its order to pay adjusted gross revenue (AGR) dues of Rs 1.47 lakh crore to the Telecom Department.
The order raised concerns over banks' exposure to AGR-hit telecos, mainly Vodafone Idea, which reported more than Rs6,000-crore loss for the October-December quarter. 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 top gainer, spurting 4.69 per cent, with analysts saying the Indian telecom sector could turn into a duopoly. Vodafone Idea, which is staring at statutory dues worth Rs 53,000 crore, plummeted 23.21 per cent.
"Supreme Court ruling on telecom players instructing them to pay dues by March 17 will impact the asset quality of banks having decent exposure in the sector. Banking stocks will be under pressure given high inflation and RBI being unlikely to cut rates in the near-term.
Indian market is impacted due to fall in global market due to increase in Coronavirus cases," said Vinod Nair, Head of Research at Geojit Financial Services.
On a weekly basis, the BSE Sensex climbed 115.89 points or 0.28 per cent, while the Nifty gained 15.15 points or 0.12 per cent.
Globally, Asian markets reeled under the Coronavirus threat after a dramatic spurt in the number of deaths and new cases fuelled suspicion that China might be concealing the true scale of the epidemic.
