Indian shares fall as cenbank report drags banks; IT stocks cap losses

Credit: REUTERS/FRANCIS MASCARENHAS

Indian shares inched lower on Monday, dragged by heavyweight banking stocks after a central bank report forecast a potential jump in bad loans as a fallout of the COVID-19 pandemic, while IT stocks capped losses.

NSE index falls 0.56%, BSE index down 0.51%

Nifty banking index slides 3.6%

ICICI Bank sheds 5.9%

BENGALURU, July 27 (Reuters) - Indian shares inched lower on Monday, dragged by heavyweight banking stocks after a central bank report forecast a potential jump in bad loans as a fallout of the COVID-19 pandemic, while IT stocks capped losses.

The NSE Nifty 50 index .NSEI closed down 0.56% to 11,131.8 and the benchmark S&P BSE Sensex .BSESN ended 0.51% lower at 37,934.73.

Banking stocks slid after a report released by the Reserve Bank of India (RBI) on Friday evening said bad loans could rise as much as 15% of the total loans by March 2021.

The report further said the pandemic could increase financial vulnerabilities, including corporate and household debt burdens in the case of a severe economic contraction.

Rating agency Fitch on Monday also said India's state-run banks would have "substantially higher" recapitalisation requirements as a pandemic-led asset quality deterioration begins.

The Nifty banking index .NSEBANK fell as much as 3.6%, with HDFC Bank HDBK.NS shedding 3.3% and Axis Bank AXBK.NS dropping 3%. The state-run banking index .NIFTYPSU declined as much as 3.3%.

ICICI Bank ICBK.NS fell about 6% after the lender reported a profit that missed estimates for the quarter ended June as its provisions for bad loans rose sharply.

IT stocks capped losses and the sector's main sub index .NIFTYIT rose 0.7%. HCL Technologies HCLT.NS rose 3.13%, Infosys INFY.NS gained 2.8% and Tata Consultancy Services TCS.NS advanced 2.3%.

Total cases of COVID-19 in India saw a record jump of nearly 50,000 infections over the last 24 hours and touched 1.44 million by Monday morning, according to government data.

Prime Minister Narendra Modi said on Sunday the country needed to be "extra vigilant" as the threat from the virus persisted.

(Reporting by Derek Francis in Bengaluru; Editing by Shinjini Ganguli)

((derek.francis@thomsonreuters.com; +91-9986311363 and @derekfrancis089 on Twitter;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

INFY TCS

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More