Financial stocks extend decline; ICICI, Axis Bank, 19 others hit 52-wk lows
The sudden economic stop caused by Covid-19 containment measures will lead to a global recession this year, bringing intense credit pressure, said S&P Global Ratings
 "Financial stocks extend decline; ICICI, Axis Bank, 19 others hit 52-wk lows")
premium
Shares of financial companies including banks, non-banking finance companies (NBFCs), insurance and micro finance companies (MFCs) were reeling under pressure on Wednesday on expectation of slower growth amid coronavirus (Covid-19) concerns.
ICICI Bank, IndusInd Bank, Axis Bank, DCB Bank, Bandhan Bank, Manappuram Finance, Equitas Holdings, Mahindra & Mahindra Financial Services, Max Financial Services and Ujjivan Financial Services were among the 21 stocks from the financial sector that hit their respective 52-week lows on the National Stock Exchange (NSE) today.
At 10:09 am, Nifty Bank, Nifty Fin Services and Nifty Private Bank indices were down nearly 3 per cent, as against a 1.4 per cent decline in the Nifty50 index. In the past one week, most of the frontline financial sector stocks have slipped in the range of 20 per cent to 40 per cent, as compared to a 15 per cent fall in the benchmark index.
“The sudden economic stop caused by Covid-19 containment measures will lead to a global recession this year, bringing intense credit pressure to bear on creditworthiness worldwide”, S&P Global Ratings said in a report.
S&P Global Ratings on Wednesday lowered India's economic growth forecast to 5.2 per cent from 5.7 per cent for 2020, saying the global economy is entering a recession amid the coronavirus pandemic.
The timing of a recovery depends, most of all, on progress in containing viral spread. Even if major progress is made during the second quarter, after a sustained period of stressed cash flow many firms will be in no position to resume investing quickly, the agency said.
Households that have either lost their jobs or have worked fewer hours will spend less. Banks will be busy managing the deterioration in asset quality. There will be pent-up demand but the longer the crisis drags on, the weaker it will be, it added.
Given the events unfolding in the domestic financial system and outlook of slowing global growth, the analyst at JM Financial Institutional Securities expect slower growth for early financial year 2020-21 (FY21).
Among the individual stocks, IndusInd Bank hit a fresh multi-year low of Rs 550, down 9 per cent in the intra-day trade today, despite the private sector lender saying that it is financially strong, well-capitalised, profitable, and a growing entity with strong governance. The bank expects net non-performing assets (NPA) to drop below 1 per cent in March ended quarter. The stock has tanked 36 per cent in the past one week.
| COMPANY | LATEST | ONE-WEEK BEFORE | LOSS(%) |
| MAGMA FINCORP | 21.05 | 34.30 | -38.6 |
| EQUITAS HOLDINGS | 55.00 | 87.75 | -37.3 |
| BANDHAN BANK | 245.00 | 376.45 | -34.9 |
| UJJIVAN FIN.SER. | 204.15 | 302.80 | -32.6 |
| JM FINANCIAL | 66.55 | 98.70 | -32.6 |
| L&T FIN.HOLDINGS | 65.85 | 97.35 | -32.4 |
| TOUR. FIN. CORP. | 37.20 | 54.25 | -31.4 |
| INDUSIND BANK | 587.35 | 853.65 | -31.2 |
| MUTHOOT CAP.SERV | 307.95 | 443.25 | -30.5 |
| MANAPPURAM FIN. | 100.90 | 145.00 | -30.4 |
| CENTRUM CAPITAL | 11.40 | 16.15 | -29.4 |
| EDELWEISS.FIN. | 48.50 | 68.20 | -28.9 |
| I D F C | 20.80 | 28.90 | -28.0 |
| M & M FIN. SERV. | 233.20 | 323.85 | -28.0 |
| REPCO HOME FIN | 188.70 | 257.65 | -26.8 |
| MAX FINANCIAL | 369.75 | 501.60 | -26.3 |
| IDFC FIRST BANK | 24.55 | 33.30 | -26.3 |
| AU SMALL FINANCE | 772.15 | 1029.35 | -25.0 |
| CREDITACC. GRAM. | 626.40 | 833.25 | -24.8 |
| SATIN CREDITCARE | 117.10 | 155.65 | -24.8 |
| IIFL FINANCE | 106.65 | 141.70 | -24.7 |
| AXIS BANK | 467.60 | 618.75 | -24.4 |
| RBL BANK | 172.20 | 226.65 | -24.0 |
| ADITYA BIRLA CAP | 51.75 | 68.05 | -24.0 |
| SHRIRAM TRANS. | 751.65 | 987.30 | -23.9 |
| DHANLAXMI BANK | 8.95 | 11.70 | -23.5 |
| HDFC AMC | 2239.15 | 2919.15 | -23.3 |
| SOUTH IND.BANK | 6.08 | 7.92 | -23.2 |
| FEDERAL BANK | 55.05 | 71.40 | -22.9 |
| ICICI BANK | 360.50 | 465.40 | -22.5 |
| DEWAN HSG. FIN. | 11.71 | 15.10 | -22.5 |
| MAH. SCOOTERS | 2927.55 | 3767.95 | -22.3 |
| RELIGARE ENTERP. | 24.40 | 31.35 | -22.2 |
| CHOLAMAN.INV.&FN | 204.85 | 262.45 | -22.0 |
| ICICI PRU LIFE | 317.25 | 404.70 | -21.6 |
| MUTHOOT FINANCE | 655.20 | 834.70 | -21.5 |
| MOTIL.OSWAL.FIN. | 569.65 | 723.85 | -21.3 |
| BF INVESTMENT | 234.00 | 297.20 | -21.3 |
| SBI LIFE INSURAN | 638.50 | 810.50 | -21.2 |
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%