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Sensex, Nifty slump for second week as Yes Bank woes drag financial stocks down
Photo Credit: Reuters

Indian stocks slumped on Friday with banks and non-bank companies dropping after the Reserve Bank of India’s decision to impose a moratorium on Yes Bank unnerved investors already jittery over the coronavirus outbreak.

The BSE’s 30-stock benchmark Sensex opened 2.2% lower at 37,613.96 and then extended the fall in early trade to touch a low of 37,011.09 before closing the day 2.3% down at 37,576.52.

The National Stock Exchange’s 50-stock Nifty also fell almost 3% in opening trade. It closed 2.6% down at 10,979.55.

The two benchmark indexes fell 1.9% each for the week, after plunging 7.3% in the previous week.

The BSE Bankex index and the NSE’s Nifty Bank index also slipped 3.5% each on Friday. Yes Bank slumped 56% while RBL Bank slipped 14%. IndusInd Bank and AU Small Finance Bank fell 10% each in intra-day but pared the losses later to close down 5.6% and 3.6%, respectively.

State-run banks fell, too. Both United Bank of India and Corporation Bank lost 20% and Allahabad Bank skid 17%. State Bank of India fell as much as 12%, before paring the losses to end 6% lower.

Among non-banking finance companies, Edelweiss Financial Services Ltd fell almost 12%.

The RBI had on late Thursday imposed a moratorium on Yes Bank and superseded its board after the country’s fifth-largest private-sector lender failed to raise capital from investors to cover for potential bad debts.

The central bank also capped withdrawal of deposits from Yes Bank to Rs 50,000 and appointed former State Bank of India chief financial officer Prashant Kumar as the lender’s administrator.

The RBI is also putting in place a scheme for reconstruction or amalgamation, it said in separate statements late in the evening. The regulator said it is taking these measures to “restore depositors’ confidence” in Yes Bank.

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