You are here: Home » Markets » News
Business Standard

Bank Nifty crashes 7% to 3-year low over rising Coronavirus pandemic

The fall in banking stocks has a huge bearing on the overall markets as the sector has the high­est weighting in the bench­mark indices

Business Standard 

MARKET LIVE: Coronavirus pandemic triggers 2,400-point Sensex collapse
The banking sector has been the worst hit in the ongoing market carnage.

Banking stocks saw intense selling pressure on Wednesday with the index crashing 7 per cent to 20,511, lowest since March 3, 2017. Private sector players (fell 24 per cent), (11.5 per cent) and (8 per cent) saw the deepest cuts.

Analysts say investors have turned wary of the financial sector fearing the economic damage caused by the coronavirus pandemic could lead to spiralling of bad loans and also hurt demand for incremental credit. Investors also fear banks will be forced to offer forbearance packages to troubled businesses and individuals. Already, many banks have been sailing in troubled waters with regards to their exposure to distressed sectors like telecom, aviation and NBFCs.

The banking sector has been the worst hit in the ongoing market carnage. This year, the cumulative market cap erosion for listed banks has been Rs 9 trillion. The four biggest players HDFC Bank, ICICI Bank, and State Bank of India have each seen around Rs 1 trillion of market cap wiped out. Shares of most banks are quoting at multi-year lows. The fall in banking stocks has a huge bearing on the overall as the sector has the high­est weighting in the bench­mark indices. Also, banking stocks are the most over-owned by mutual funds as well as overseas investors.

Graph

Compiled by BS Researcu Bureau

First Published: Wed, March 18 2020. 23:43 IST
RECOMMENDED FOR YOU