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Sensex Closes 99 Points Lower, Nifty Holds 10,550; PNB Slumps 12%

The Nifty PSU Bank index fell as much as 2.7 per cent, dragged by a nearly 9 per cent decline in PNB shares.

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Sensex Closes 99 Points Lower, Nifty Holds 10,550; PNB Slumps 12%

Investor sentiment was tepid ahead of GDP data for the December quarter due for release on Wednesday


The BSE Sensex shed 99 points to close at 34,346 on Tuesday, dragged by bank stocks after Punjab National Bank (PNB) uncovered more fraudulent transactions. The National Stock Exchange (NSE) benchmark index Nifty settled 28 points lower at 10,554. Investors also traded cautiously ahead of release of GDP growth data for the quarter of October-December. PNB shares closed 12 per cent lower at Rs 98.35. With that, the bank's stock lost nearly 40 per cent of its value since February 14, when the fraud was first disclosed by the bank.

PNB, in a regulatory filing late on Monday, disclosed fraudulent transactions of over Rs 1,300 crore, in addition to the Rs 11,400 crore reported earlier. The alleged fraud, by far the biggest ever detected by an Indian bank, is centred around companies linked to billionaire jeweller Nirav Modi and his uncle Mehul Choksi, owner of Gitanjali Gems Ltd.

Besides banks, some selling was witnessed in metal and realty shares. On the 50-scrip Nifty index, Axis Bank, SBI and Sun Pharma were among the top losers - closing the session with losses of up to 2.5 per cent.

Investor sentiment was also tepid ahead of domestic economic data including October-December quarter gross domestic product (GDP) and fiscal deficit. A Reuters poll forecast GDP expansion at 6.9 per cent, the fastest in 2017.

"There is caution ahead of the economic data, but it is expected to be positive," said Vinod Nair, head of research at Geojit Financial Services.

"If the data is as expected, there could be some consolidation, and apart from the uncertainties around PSU banks, the outlook overall for the near term is positive."

Ambuja Cement and ACC shares closed down around 4 per cent and 2 per cent respectively, after the cement companies late on Monday said they had put on hold plans for a proposed merger.

(With agency inputs)

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