Explained: Why bank results can move the whole market
The Sensex fell 876.37 points to 73,852.90 and the Nifty 50 lost 257.20 points to 22,888.95 on October 19, snapping a two-day winning streak, as private banks and IT stocks dragged and crude oil stayed near 108 dollars.
Banks have a large weight in the Nifty and the Sensex.
When a large private bank misses profit estimates, its shares fall and drag the index.
On October 19, Axis Bank fell 4.2% after its September-quarter profit narrowly missed expectations.
The Nifty Private Bank index fell about 1.9%.
The Sensex ended 876.37 points lower.
Both indices had rallied about 3% in the previous week, their strongest weekly gain in six months, according to HDFC Sky.
Market breadth was weak, with 2,925 shares declining, 1,163 advancing and 181 unchanged, according to HDFC Sky.
The Nifty Midcap index fell about 1.1% and the Nifty Smallcap index shed about 1%, according to the same report.
The Nifty Private Bank index fell about 1.9%, the Nifty IT index fell 1.3% after a 3.9% gain in the previous session, and the Nifty FMCG index fell 1.4%.
The Nifty PSU Bank index rose 2.5% and was the only major sectoral index to finish higher, according to HDFC Sky.
Axis Bank fell 4.2% after its September-quarter profit narrowly missed analyst expectations, with higher operating expenses and weaker other income offsetting strong credit growth and lower provisions, according to HDFC Sky.
Among other large stocks, LTIMindtree fell 2.8%, Infosys fell 2.63%, Bajaj Finance fell 2.52%, Yes Bank fell 3.5% and Tata Motors Passenger Vehicles fell 3.09%, according to the article text.
Union Bank of India rose about 5.3% and Punjab National Bank rose about 4.8%, according to HDFC Sky.
Punjab National Bank reported net profit up 13% year on year to Rs 5,532 crore, with net interest income up 11% to Rs 11,601 crore and the gross NPA ratio improved by 90 basis points to 2.55%.
ICICI Bank reported a better-than-expected quarterly profit, but its shares fell 1.15%, according to the same report.
LTIMindtree’s profit missed forecasts despite revenue growth, and UltraTech Cement’s quarterly profit missed estimates, according to HDFC Sky.
Dalal Street sign board, Mumbai (file image), Wikimedia Commons, CC BY-SA 4.0
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