Sensex hits lowest since May 2014; banks, metals slump

MUMBAI (Reuters) - The BSE Sensex fell to its lowest levels since May 2014 on Wednesday, with State Bank of India leading the losses ahead of its financial results that are expected to disappoint just as other major state-run banks did this quarter.

Four state-run banks reported a spike in bad loans and provisions for sour debt on Tuesday after a clean-up exercise ordered by their regulator, sending three of them to net losses for the fiscal third quarter.

Traders say global slowdown and China worries have been a drag, but disappointing earnings especially from state-run banks have made things gloomy for domestic markets.

 

"Earnings season hasn't been robust so far. Global uncertainties, China slowdown are making things worse for us," said Jagannadham Thunuguntla, Head of Fundamental Research at Karvy Group.

The broader NSE Nifty and the benchmark BSE Sensex fell as much as 1.15 percent.

Punjab National Bank lost as much as 8.4 percent as the fourth largest state-run lender reported a 93 percent slump in profits and brokerages took a grim view.

BSE Metal index lost as much as 2.34 percent as London copper slipped towards its lowest level in a fortnight as holidays in top consumer China entered a third day, dampening demand, while global growth fears dragged on prices.

Cement major ACC Ltd , a Holcim group company, fell ahead of reporting quarterly results that are expected to lag street estimates, as per Thomson Reuters Starmine SmartEstimates.

Cairn India lost more than 6 percent as Brent crude fell 8 percent to $30/bbl overnight after weak demand forecasts from the U.S. government and the western world's energy watchdog.

(Reporting by Manoj Rawal; Editing by Gopakumar Warrier)