Sensex Today Tanks 523 Points | NHPC Plunges 15%, Bharat Forge 14% | 3 Reasons Why Indian Share Market is Falling

Mon, 12 Feb Closing

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After opening the day lower, Indian share markets continued the downtrend as the session progressed and ended the day on weak note.

Benchmark indices turned lower on Monday amid profit booking by investors ahead of the January retail inflation and December IIP output data due later today.

At the closing bell, the BSE Sensex stood down by 523 points (down 0.7%).

Meanwhile, the NSE Nifty closed down by 166 points (down 0.8%).

Apollo Hospital, Wipro and HCL Tech were among the top gainers today.

Coal India, BPCL and ONGC on the other hand, were among the top losers today.

The GIFT Nifty was trading at 21,704 down by 146 points, at the time of writing.

Broader markets ended on mixed. The BSE MidCap index ended flat and BSE SmallCap index ended 3% lower.

Barring It sector and media sector, all other Sectoral indices ended lower with realty sector, power sector and metal sector witnessed selling pressure.

Shares of Bosch, Bajaj Auto and ACC hit their respective 52-week highs today.

Now track the biggest movers of the stock market using stocks to watch today section. This should help you keep updated with the latest developments...

Asian share markets ended mixed. The Shanghai Composite ended 1.3% higher, while the Nikkei index ended flat. Meanwhile Hang Seng ended 0.8% lower.

The rupee is trading at 83.01 against the US$.

Gold prices for the latest contract on MCX are trading 0.2% lower at Rs 62,170 per 10 grams.

Meanwhile, silver prices are trading 0.9% higher at Rs 71,393 per 1 kg.

Here are three reasons why Indian Markets are falling today.

#1 Selloff in banking stock

The Nifty Bank index was nearly 2%, with Bandhan Bank, PNB, Kotak Bank, IDFC First Bank and IndusInd Bank leading the losses. All 12 index constituents were trading in the red.

The Nifty PSU bank index was down over 3%, as Indian Overseas Bank, Central Bank, PSB, Maharashtra Bank, UCO Bank and Indian Bank stocks fell up to 10% intraday

#2 Realty stocks drag

The Nifty realty index was down more than 3% as a correction of up to 5% was seen in names like Sobha, Lodga (Marcotech Developers) and Phoenix Mills.

#3 Rout in midcaps & smallcaps

SJVN, Amber Enterprises, NBCC (India), HUDCO, IRB Infrastructure Developers, Indian Overseas Bank and MCX India were among the top losers on the smallcap index as they fell in the range of 9 to 20%.

In the Nifty midcap 100 index, NHPC, IRFC, Bharat Dynamics, RVNL and Yes Bank shares declined the most with a loss of around 8 to 12%.

Speaking of stock markets, Tata Motors has now gone past Maruti Suzuki to emerge as India's most valuable auto manufacturer.

From a loss of Rs 287 bn in FY19, perhaps its highest ever, Tata Motors has earned record profits of Rs 157 bn in the trailing twelve-month period. And it is this turnaround that has led to investors warming up to the stock and turning it into a 12-bagger since its March 20 lows.

However, when it comes to fundamental parameters like profitability, return ratios and balance sheet strength, Maruti is comfortably ahead of Tata Motors.

Why is it then Tata Motors enjoys nearly the same valuation as Maruti? Why is Mr Market considering Tata Motors at par with Maruti?

Co-head of Research, Rahul Shah answers this in below video.

Why SpiceJet Share Price is Falling

In news from the airline sector, SpiceJet shares fell 4% on 12 February, following reports that the low-cost airline would cut down the workforce by 10-15% to reduce fixed costs. The job-cuts will help the airline save around Rs 1 bn.

SpiceJet has lined up more cost-saving measures to stay afloat in the coming months.

These layoffs are essential for aligning companywide costs with operational requirements, according to the report. The cash-strapped airline currently has 9,000-9,500 employees and bears a salary bill of Rs 600 m.

The airline currently operates 30 aircraft, 10 of which are wet-leased. The picture is very different as compared to 2019 where SpiceJet had a fleet of 118 planes and 16,000 employees.

The airline has been directed by the Delhi High Court to settle the outstanding dues amounting to $4 million it owed two engine lessors, by 15 February 2024.

Failure to comply with the court's directive could result in adverse legal action, with the lessors expressing their intention to pursue litigation against the airline.

In 2023, the stock has zoomed over 71%.

Bandhan Bank Sheds 7%. Here's why.

Moving on to news form the Bandhan Bank, shares of Bandhan Bank plunged over 7% to Rs 200 each on 12 February as loans worth Rs 233 bn it lent out under credit guarantee schemes came under review by the National Credit Guarantee Trustee Company (NCGTC) on doubts of evergreening.

Evergreening of loans is a practice of extending new or additional loans to a borrower who is unable to repay the existing loans, thereby, concealing the true status of non-performing assets (NPAs) or bad loans.

It will review Rs 208 bn of loans covered under the Credit Guarantee Fund for Micro Units (CGMFU) and Rs 25 bn of loans covered under the government's Emergency Credit Line Guarantee Scheme (ECLGS).

In FY20-21, Bandhan Bank had secured insurance of Rs 208 bn through CGFMU and distributed nearly Rs 19.5 bn under ECGLS.

Out of this, nearly 85% has been repaid by customers and the remaining portfolio carries 88% provisioning.

In the case of Bandhan Bank, the audit extends beyond NPA accounts subject to guarantee claims initiation.

It also involves identifying trends and patterns to evaluate portfolio inflation through fictitious customers.

Bandhan Bank's total income declined 1 percent year-on-year (YoY) to Rs 3.1 bne in Q3FY24, while operating profit slipped 13.5% to Rs 1.7 bn. The lender's net interest margin (NIM) expanded by 0.7% to 7.2% in the December 2023 quarter.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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