Sensex dives 224 points as Turkish crisis frightens investors

The broader NSE Nifty too fell by 73.75 points to end at 11,355.75.

The Indian rupee today plummeted to its life-time low of 69.85 (intra-day) against the US dollar, tracking global cues.

A massive selling pressure was seen in financials and PSU shares after constant fall in Turkish lira fuelled demand for safe havens.

"Flare-up of tensions between the US and Turkey hit global financial markets by surprise and the ripple effect has seen in domestic market too. Despite upbeat June IIP growth of 7 per cent, weak global cues and deprecating INR led investors to book profits. However, considering revival in corporate earnings, declining oil prices, improving domestic macros and reversal in FIIs flows, the downside for the market is largely protected," Vinod Nair, Head of Research, Geojit Financial Services Ltd, said.

Among banking stocks, SBI dived 3.17 per cent after the lender reported a hefty loss of Rs 4,876 crore for the June quarter.

Other lenders such as Punjab National Bank, Yes Bank, Bank of Baroda, Federal Bank, Axis Bank, HDFC Bank and ICICI Bank fell by up to 3.37 per cent.

Among Sensex constituents, Vedanta fell 3.40 per cent, followed by SBI 3.17 per cent, Yes Bank 3.11 per cent, Axis Bank 1.68 per cent, ONGC 1.60 per cent, Power Grid 1.52 per cent and HDFC 1.48 per cent.

Other laggards were RIL 1.40 per cent, Asian Paints 1.39 per cent, NTPC 1.28 per cent, HDFC Bank 1.15 per cent, Tata Steel 1.10 per cent, HUL 0.90 per cent, ICICI Bank 0.88 per cent, Tata Motors 0.68 per cent, Maruti Suzuki 0.67 per cent, Hero MotoCorp 0.48 per cent, Adani Ports 0.29 per cent and Bharti Airtel 0.14 per cent.

Asian and European shares too fell tracking last week's sell-offs on Wall Street. Investor sentiment took a hefty blow as Turkish currency, lira, crisis fears spread to financial markets globally.

Meanwhile, the outlook for the country's banking sector is likely to remain negative until its capital position strengthens in proportion to the bad loans and weak financial performances, according to Fitch Ratings.

The rating agency said the USD 151-billion stock of bad loans remains a risk for the sector's weak income base, which is vulnerable to ageing provisions and slower non-performing loans (NPLs) resolution.

The Sensex, which resumed lower at 37,693.19, continued its slide and touched a low of 37,559.26 as selling intensified.

However, the benchmark recovered marginally on value-buying and covering-up of short positions. It ended at 37,644.90, down 224.33 points, or 0.59 per cent.

The gauge had lost 155.14 in the previous session.

The broader NSE Nifty, after cracking the 10,400-mark, ended 73.75 points, or 0.65 per cent, lower at 11,355.75.

Sectoral indices led by oil and gas, PSU, financial, energy, banking, infrastructure, power, metal, realty, auto and capital goods ended in the negative terrain, falling by up to 1.93 per cent.

Vedanta, ONGC, HDFC, Reliance Industries, HUL, Asian Paints, Power Grid, NTPC, Tata Motors, Maruti Suzuki, Hero MotoCorp, Adani Ports and Tata Steel contributed the most to the losses in the 30-share Sensex pack.

However, IT and teck stocks ended in the positive zone as the rupee fell.

Foreign funds sold shares worth Rs 510.66 crore, while domestic institutional investors bought equities worth Rs 457.83 crore on Friday, provisional data showed.

The broader markets depicted a weak trend, with the BSE small-cap index falling 0.78 per cent and the mid-cap 0.70 per cent. 

In sectoral terms, the BSE oil and gas index emerged as the worst performer, losing 1.93 per cent, followed by PSU 1.90 per cent, energy 1.70 per cent, finance 1.33 per cent, bankex 1.20 per cent, infrastructure 1.04 per cent, power 0.99 per cent, metal 0.78 per cent, realty 0.72 per cent, auto 0.69 per cent and capital goods 0.33 per cent.

However, IT index topped the list by rising 1.24 per cent, followed by teck 0.77 per cent, healthcare 0.55 per cent, FMCG 0.16 per cent and consumer durables 0.06 per cent.

In contrast, Infosys was the top gainer in the Sensex pack, rising 1.75 per cent followed by Wipro 1.31 per cent and TCS 0.33 per cent as the rupee hit record low.

Other gainers were Sun Pharma 1.65 per cent, M&M 0.96 per cent, Coal India 0.89 per cent, IndusInd Bank 0.62 per cent, ITC 0.39 per cent, L&T 0.29 per cent and Kotak Bank 0.06 per cent.

On the macro front, industrial output recorded a five-month high growth of 7 per cent in June as the production of consumer durables and capital goods picked up pace ahead of the festive season. The data was announced post market hours on Friday.