 "Bear market, Stock market")
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 |
