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Sensex continues to trade in red after dropping 1000 points in early trade, day after HDFC Q3 results
Sensex tanks 1000 points to 72,163; Nifty drops below 22,000 mark
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Sensex continued to be in the red at 71,708, down by 1,400 points hours after the BSE benchmark tanked by 1000 points in early trade.
Indian shares had declined on Wednesday, as a drop in top private lender HDFC Bank after its quarterly results dragged high-weightage financials, while Asian peers eased after China's quarterly growth fell short of expectations.
The NSE Nifty 50 shed 1.11% to 21,789.15 points, while the S&P BSE Sensex lost 1.16% to 72,281.77, as of 10:04 a.m. IST.
The highest weighted stock on the benchmark indexes HDFC Bank lost as much as 7.10%, its highest single-session percentage fall since May 4, 2020, after reporting stagnant margins for second consecutive quarter.
"Operating profit growth drivers appear to be less sustainable and the bank reported higher provisions," analysts at Kotak Institutional Equities said in a note.
The underlying deposit growth environment has deteriorated while the drivers for net interest margin expansion appear to be slower than expected, they added.
The slide in HDFC Bank's shares also weighed on the bank index and the financial services index, with both down about 2.5%.
Eleven of the 13 major sectors logged losses.
HDFC, China GDP prime reasons for market drop
One of the main reasons why the stock market recorded a steep decline today was due to the stop in HDFC Bank shares on Wednesday. The shares of the private lender dropped by over 7 percent, causing a major impact on BSE Sensex during early trade hours.
The share price drop of HDFC alone led to a 700 point drop on the benchmark Sensex. Other laggards on the market included Axis Bank, Tata Steel, Kotak Mahindra Bank, ICICI Bank, Tata Motors, and Bajaj Finance.
Another reason why Indian markets dropped today was because of the quarterly GDP of China recording less than expected growth, causing markets in Hong Kong, Taiwan and Korea to tumble on January 17.
(With inputs from Reuters)
