Markets take a beating on Covid-19, YES Bank crisis

Domestic markets plunged on Friday due to a double-whammy from Covid-19 and YES Bank crisis. While the BSE Sensex plunged 894 points, the broader Nifty-50 crashed below the key 11,000-mark on Friday as regulatory curbs on YES Bank triggered a margin pressure among domestic investors while foreign portfolio investors continue their selling-spree fearing coronavirus spread.

The BSE Sensex tanked 894 points to settle the day at 37,577. During the day, the index hit a low of 37,011 levels. The broader NSE Nifty shed 279.55 points to close at 10,989.45.

For the 10th day in a row, foreign investors have been pulling out from Indian equity markets. They sold almost ₹10,000 crore in the last 10 days. On Friday alone, according to exchange data, they net sold ₹3,594 crore worth shares.

Margin pressure

Freezing of YES Bank has lead to stock markets reeling under massive margin pressure, said analysts. News of freeze on YES Bank came in late in the evening on Thursday. The RBI said it had superseded the YES Bank board and limited withdrawals to ₹50,000 per account holder monthly.

On Friday morning, the NSE issued a notice that brokers, who had placed FD and other instruments as collateral for availing position in the stock market, will have to bring in additional fund of up to 100 per cent. Besides, it also said that those who deposited YES Bank shares as a collateral will have to bring 100 per cent fresh margin.

“The existing benefits provided to members towards bank guarantees and FD issued by YES Bank in favour of NSE shall be reduced by 50 per cent of collateral value provided beginning March 9 and remaining 50 per cent by March 11.”

Meaning, brokers will have to put up 100 per cent fresh margin by March 11 to avail new position limit if they had earlier used YES Bank facility for the same, compliance officer of the broking house said.

Yes Bank shares on Friday tanked 56 per cent to close at ₹16.20 apiece against the previous close of ₹36.85 on BSE. In intraday trading, it touched a high of ₹33.20 and a low of ₹5.55.

SBI shares too took a beating, closing at ₹270.45 apiece, down 17.85 per cent over the previous close of ₹288.30.

YES Bank controversy triggered selling pressure on other banking counters too. The Nifty Bank Index plunging 3.52 per cent.

Tata Steel was the top laggard in the Sensex pack, followed by IndusInd Bank, HDFC, ICICI Bank and ONGC.

Bajaj Auto, Maruti and Asian Paints were the only gainers.