Oil & Gas, financials drag Nifty below 7,900

Of the 331point cut seen on the Sensex, RIL, ONGC, ICICI Bank, SBI and Axis Bank alone contributed to 285 points

Benchmark indices edged lower in the closing hour of trade with the Nifty breaking below the physiological 8,000 level on account of weakness in oil and gas and financial scrips.

At 1500 hrs, the Sensex was down 331 points at 26,414 and the Nifty gave off 107 points to trade at 7,895.

RIL, ONGC, ICICI Bank, SBI and Axis Bank alone contributed to 285 points fall seen on the BSE benchmark index.
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(Updated at 1500 hrs)
Markets are trading weak in late noon deals today with the benchmark indices – the S&P BSE Sensex –slipping nearly 1%, or 220 points to 26,532 levels. The 50-share CNX Nifty, on the other hand, has lost around 0.6% to 7,955 levels.

Weakness is also visible in the mid-and small-cap segment with the S&P BSE Mid-cap index and the S&P BSE Small-cap index slipping 1.7% and 2.4% respectively in late noon deals.

Hindalco, Bhel, Axis Bank, Tata Steel, ONGC, SBI, ICIC Bank and Reliance Industries (RIL) are some of the prominent Sensex losers that have lost between 2.5% - 5.6%.

Policy decisions taken a day earlier are continuing to impact metal and oil & gas stocks that have lost heavily in trade today. S&P BSE Metal and S&P BSE Oil & Gas index are trading lower by over 2% each in late noon deals and are among the top sectoral losers. While ONGC, Petronet LNG, RIL, Cairn India and Indian Oil (IOC) skidded between 1.1 – 3.8%, Jindal Steel & Power (JSPL), Hindalco, Bhushan Steel, Tata Steel, JSW Steel and Sesa Sterlite have lost between 2.5 – 8.8% till late noon.

State-owned banks also came under pressure on account of quality assets concerns on account of their advances to companies whose coal block allocations have been cancelled. SBI, Bank of India, Bank of Baroda, PNB and Canara Bank are some of the top losers in this space.

“Along with the power companies, banks are also going to bear the brunt of the Supreme Court's decision on coal block allocations. Banking sector has exposure of 8.8% of non-food credit to the power sector. Cancellation of allotted coal blocks to projects will adversely impact the chances of recovery of these loans.  Further, the banks which lent money to supplier of these power producers will also find many more loan accounts turning bad,” points out a note from Karvy.

“We maintain our cautious view on the sector, especially on the public sector banks, which has relatively higher exposure to the sector. In current environment and macro headwinds; we would recommend investors to skew their position more towards private sector banks.” It adds.