Markets

Despite Jaitley’s liquidity talk, Sensex falls 536 pts

Our Bureaus Mumbai/New Delhi | Updated on September 24, 2018 Published on September 24, 2018

FILE PHOTO- Bombay Stock Exchange   -  BL

Home-finance NBFCs lead fall; IL&FS woes, too, weigh on market

The sell-off in the stock market refused to die down on Monday despite an assurance from Finance Minister Arun Jaitely about adequate liquidity.

Jaitely took to Twitter on Monday morning to calm frayed nerves on liquidity conditions in the wake of a ‘supposed’ crunch caused by the IL&FS fiasco. “The government will take all measures to ensure that adequate liquidity is maintained/provided to NBFCs, mutual funds and SMEs,” he tweeted nearly half-an-hour before the equity markets opened.

The Sensex, however, fell 536 points, or 1.46 per cent, to close at 36,305. It has shed 1,700 points in the past five trading sessions. The CNX Nifty of the NSE fell 175 points, or 1.58 per cent, to 10,967.

NBFC stocks, mainly in the housing finance space, remained under pressure. HDFC fell 6.22 per cent on the back of negative sentiment from last week’s share crash in DHFL and YES Bank.

Recent blood bath

On Friday, infrastructure finance firm IL&FS had disclosed that it had missed more payments on its debt obligation. This had led to the bond and forex markets turning volatile that day. The Sensex had witnessed a 1,500-point swing on Friday as YES Bank crashed by 30 per cent and DHFL fell 60 per cent.

On Sunday, the RBI and SEBI had sought to assure the market. “The Reserve Bank of India and the Securities and Exchange Board of India are closely monitoring the recent developments in financial markets and are ready to take appropriate actions, if necessary,” the regulators had said in statements issued simultaneously.

SBI joins in

The nation’s biggest lender, State Bank of India, too, came out with assurances. Its Chairman, Rajnish Kumar, dismissed as baseless rumours comments attributed to SBI that it was turning wary of lending to NBFCs.

“SBI lends support to NBFCs... and will continue to do so. In fact, the recent regulatory guidelines on the co-lending model opens up further opportunities for collaboration between SBI and non-deposit taking NBFCs to increase lending to priority sectors. There is no concern on liquidity of NBFCs in view of their liquid cash position and availability of committed lines,” he said.

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Published on September 24, 2018
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