- Selloff across sectors led by banking stocks drags markets lower
- Reliance Industries, ICICI Bank, SBI wipe out 194.23 points from Sensex
- Nifty Bank ends 1.30% lower, after dropping 3.52% during session
Here are 10 things to know about the sharp fall in stocks markets today:
Thirty nine stocks on the 50-scrip Nifty closed lower. Yes Bank was top loser in the Nifty 50 basket of shares thstock slumped 22.22 per cent lower to close at Rs 32.20. Zee Entertainment, IndusInd Bank, SBI and Grasim also fell between 5.01 per cent and 10.79 per cent. Reliance Industries, ICICI Bank and SBI were the top drags on Sensex, collectively wiping out 194.23 points from the index.
The Nifty Bank - comprising shares of 12 major lenders of the country - settled 1.30 per cent lower for the day after declining as much as 3.52 per cent during the session.
"Governance issues at a cooperative bank are causing collateral damage in banking space highlighting concerns in the sector,” Deven Choksey of KRChoksey Investment Managers told NDTV.
Punjab and Maharashtra Co-Operative Bank managing director Joy Thomas admitted to misleading the RBI for six years by concealing and misreporting default on loans reportedly worth more than Rs. 6,000 crore taken by Housing Development and Infrastructure. Mr Thomas has been suspended for his role in the crisis and named in a first information report (FIR).
"Moreover, suspension of a big broker by the NSE has triggered a sense of panic in the market," Mr Choksey added. The NSE said in a notification it had suspended Kolkata-based BMA Wealth Creators due to non-compliance with regulatory provisions across segments from October 1.
Official data released on Monday showed the country's infrastructure output contracted 0.5 per cent in August, marking the first fall since April 2015. The weak factory activity highlights the weakness in the economy which expanded at its worst pace in more than six years in the first quarter of 2019-20.
The government has in the past one month announced a slew of measures - from withdrawal of higher taxes on foreign investors, a mega bank consolidation plan and a reduction in corporation taxes - to push consumption and growth.
Analysts say the decision by the Reserve Bank of India in its upcoming bi-monthly review will be monitored closely.
The RBI's Monetary Policy Committee began a three-day bi-monthly meeting on Tuesday. Many economists expect the central bank to announce a rate cut on Friday.