Indian shares closed lower on Friday, recouping massive losses suffered in mid-afternoon trade, triggered by panic-selling in Yes Bank and housing finance companies.
On a day marked by extreme volatility, the BSE Sensex managed to close 280 points lower at 36,842 after seeing an intra-day trading range of 1,500 points.
The NSE Nifty50 that saw 10,900 breached intra-day, recovered 277 points from lows, to end the session 92 points in the red at 11,143.
The Nifty Midcap Index ended 469 points in the red at 18,347 after a trading range of 1,558 points. And, the banking Index, Nifty Bank edged 680 points lower to 25,596.
For the week, Sensex is down 3.3 percent, Nifty 3.2 percent, Nifty Midcap Index 5.4 percent and the Nifty Bank by 6 percent.
Amongst Nifty stocks, the steepest fall was seen in Yes Bank after the Reserve Bank of India refused the extension to Rana Kapoor’s reappointment as managing director and chief executive officer.
Yes Bank had sought an extension of 3 years for Kapoor, which the RBI refused and asked the bank to appoint a new head by January 31, 2019. The development led to a fall of 29 percent with the company losing market cap of nearly Rs 22,000 crore.
Housing finance companies also saw a massive hammering, with the Dewan Housing Finance ltd the worst hit with the stock plunging by more than 50 percent.
The NBFC stock recovered 28 percent from the day’s low after the DHFL management responded on
CNBC-TV18 that it has not defaulted on any repayment. The management attributed the massive falls to rumours in the market.
DHFL stock eventually settled 43 percent lower at Rs 356 per share with market cap worth of Rs 8,600 crore erased in a single day.
DSP Mutual Fund that sold commercial papers worth Rs 200-300 crore of DHFL said, “It sold papers to improve liquidity & reduce overall maturity, not because of any concern related to the management or company.”
In the futures market, Nifty Call option of 11,200 added nearly 15 lakh shares in the open interest with premium slipping 45 percent.
Nifty Put option of 11,000 added 4 lakh shares in the open interest with premium up more than 100 percent. Nifty September Futures closed with a premium of 35 points against a premium of 38 points on Wednesday.
Asia markets were largely positive on the final trading day of the week, following record highs on Wall Street. Japan's Nikkei 225 pared some of its earlier gains but still ended the trading week higher by 0.8 percent at 23,870, with the insurance sector rising by 2.2 percent.
The Topix index also saw gains of 0.9 percent to close at 1,804— its highest point in almost four months. The moves in Japan followed a data release which showed that its nationwide core consumer price index for August rose 0.9 percent compared to a year ago.
South Korea's Kospi also saw gains of 0.7 percent to close at 2,339, but memory chipmaker SK Hynix's stock weakened by 3 percent.
Down Under, the ASX 200 ended the trading week higher by 0.4 percent at 6,195, as the financial sector advanced by 0.1 percent with most major bank stocks rising.
AMP was up 0.3 percent, while Australia and New Zealand Banking Group rose by 0.1 percent.In the Greater China region, Hong Kong's Hang Seng index extended gains of 1.6 percent to close at 27,931. Meanwhile, the Shanghai Composite jumped 2.5 percent to close at 2,797, while the Shenzhen composite also gained 1.7 percent to 1,445.