Markets nervous on scam talk, CBI raids

Sentiments in India’s stock market went for a toss on Monday. Key equity indices Sensex and Nifty fell by over 1 per cent each following a rush to get out of positions in debt-laden company stocks and those with high quantum of shares pledged by promoter group. This is after New Delhi-based digital news portal Cobrapost announced that it will expose a ‘financial scam’ worth over ₹33,000 crore on Tuesday. Cobrapost is founded by Aniruddha Bahal, the co-founder of Tehelka.

The mood in the domestic stock markets was already sombre after CBI last week raided large corporates, expectation of a populist Budget, and weak fiscal deficit numbers. The Sensex plunged over 368 points or 1.02 per cent to close at 35,656.70. The Nifty fell 119 points or 1.1 per cent to close at 10,661. Among frontline stocks, YES Bank tumbled 5.46 per cent, Bajaj Finance 5.40 per cent, ICICI Bank 3.82 per cent, IndusInd Bank 3.10 per cent, and Hero MotoCorp 2.55 per cent. The Nifty Bank ended 1.7 per cent lower.

The reason why markets took the

Cobrapost announcement seriously on Monday was that its previous expose on March 2013 had resulted into a severe crash in banking stocks. Its sting then had revealed that some major Indian banks were involved in money laundering. The revelation led to an investigation being ordered by the former UPA government into the dealings of the banks named in the sting.

But a sharp recovery in the share price of Zee Entertainment capped further declines in benchmark indices as the media company’s stock jumped nearly 15 per cent after it denied any involvement in demonetisation-linked transactions. Last week, the company was raided by the CBI.

In Asia, Hong Kong’s Hang Seng rose 0.02 per cent, Korea Kospi fell 0.02 per cent, Japan’s Nikkei declined 0.60 per cent and Shanghai Composite Index slipped 0.18 per cent.