Housing finance scam pulls Sensex down by 232 points
Panic-selling during the last hour of trade on Wednesday saw the markets take a sharp dip on the back of TV reports of a multi-crore housing loan scam, in which 8 top officials of various entities including LIC Housing Finance and three public sector banks were arrested.
As a knee jerk reaction to this, banking and realty stocks slumped on reports of a multi-crore housing loan scandal. So much so, the barometer index of BSE and the 50-unit Nifty of NSE settled at their lowest closing levels in more than two months.
While banking stocks in general fell by 1.29 to 7.76 per cent, the tainted ones like LIC Housing Finance shed 18 per cent and Central Bank of India by 8 per cent. In the realty space, D B Realty was the biggest loser which ended down 16 per cent followed by Orbit Corporation and HDIL down 8 and 6 per cent each respectively.
In a related development, the Central Bureau of India (CBI) has arrested top officials from three PSU banks and public/private financial institutions. The CBI said top officals of Bank of India, Central Bank of India, Punjab National Bank and LIC Housing Finance were receiving illegal gratification for facilitating loans. The biggest arrests included the CEO of LIC Housing Finance.
Dalal Street was already dwindling under adverse global cues of one kind or the other — be it a China rate hike fears or tension between Korean neighbours or debt crisis despite Ireland bailout — and to top it, the native 2G scam had also caused enough trouble impacting stocks in the telecom and banking space.
The markets this morning began on a positive note and gained strength mirroring a pull back in the Asian counterparts. But at the close of the day, the BSE 30-share Sensex was down 232 points or 1.18 per cent to close at 19,460, its lowest closing level since September 16, 2010. The S&P CNX Nifty was down 69 points or 1.16 per cent to settle at 5,866 at the day’s closing.
The BSE Mid-Cap index fell 1.11 per cent, while the BSE Small-Cap index fell 0.56 per cent, both outperforming the Sensex. The market breadth, indicating the overall health of the market, turned negative in late trade with as many as 1,397 shares rose, while 1,984 stocks decline and a total of 262 scrips remained static.
However, turnover was very high owing to future & option (F&O) expiry for the month on Thursday. The combined turnover traded on both bourses stood at Rs 2,35,369.99 crore. This included Rs 15,797.22 crore from NSE cash segment, Rs 2,15,180.46 crore from NSE F&O and the rest of Rs 4,392.31 crore from BSE cash segment.
