After being in the green for most part of the day Indian benchmark indices, the Nifty and the Sensex closed marginally lower on Wednesday.
The Sensex closed at 15786.4, down 78.46 points (0.49 per cent) over its previous close while the Nifty closed at 4752.35 down 19.8 points (0.41 per cent).
The indices were hit due to a continued sell off in banking stocks. State Bank of India (SBI) was down in excess of four per cent for the second day on the trot and closed at Rs 1711.2 to a share down Rs 75.5. SBI said in a statement that infusion to its Tier I Capital would happen earliest by December 2011 and latest by March 2012.
In spite of Europe opening in the green, short sellers made hay by battering banking stocks down. The Bank Nifty was down 2.45 per cent with a last traded price of 8695 (minus 218 points). BSE’s Bankex was also down 2.66 per cent and shed 272 points to close at 9947.35.
“Though Moody’s reaffirmed ICICI Bank’s rating of C-, the stock still lost 2.72 per cent on the BSE to close at Rs 778.95 a share confirming that rating downgrade was not the only reason for yesterday’s battering of SBI” said a dealer from an Indian brokerage.
Market experts expect a significant addition to banks’ gross NPA during the second quarter of FY12. There is also an expectation of a single digit credit growth given the high cost of borrowing.
Gold was down marginally at $1604 to an ounce while Nymex crude oil futures were up marginally $ 77 to a barrel.