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Sensex, Nifty fall as state-run lenders extend losses

By Reuters

  • 19 Feb 2018
Sensex, Nifty fall as state-run lenders extend losses
Credit: Reuters

Indian shares ended lower on Monday, with sentiment hurt as state-run lenders extended losses over worries about a $1.77 billion fraud disclosed by Punjab National Bank last week that has a bearing on some other banks.

The benchmark BSE Sensex closed down 0.69 percent at 33,774.66.

The broader NSE Nifty ended 0.71 percent lower at 10,378.40.

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Punjab National Bank fell for the fourth straight day and closed 8.3 percent lower.

Meanwhile, worries about the impact from guarantees to PNB loans hit other lenders. Reuters reported on Saturday that Indian banks could take a hit of more than $3 billion from loans and corporate guarantees provided to diamond companies, according to a tax department note.

“It could continue to impact for some more time. The issue of its impact on the entire PSU banking system will keep markets edgy,” said Siddhartha Khemka, head of retail research, Motilal Oswal Securities.

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UCO Bank slumped as much as 12.3 percent to its lowest since April 2009 after the state-run lender said it had $411.82 million in exposure to fraudulent transactions carried out at PNB.

City Union Bank declined as much as 5.3 percent after its chief executive said “cyber criminals” hacked the bank’s systems and transferred nearly $2 million via unauthorised remittances to lenders overseas.

Shares of air carriers rose after the aviation regulator said passengers carried by domestic airlines rose nearly 20 percent to 11.5 million in January.

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