Sensex falls 194 points, Nifty at 11,131; banks crash on RBI's bad loans forecast

Sensex and Nifty started the week on a bearish note closing lower on Monday as RBI predicted a rise in bad loans by 15% of total loans by March 21. Sensex closed 194 points lower at 37,934 and Nifty fell 62 points to 11,131.

Asian Paints, HCL Tech, Infosys, UltraTech Cement, TCS were among the top gainers, while Axia Bank, HDFC Bank, ICICI Bank, IndusInd Bank and Zee Entertainment were among the top gainers today. On the sectoral front, except IT, metal and energy index, all the other sectors closed in the red on Monday, with almost 3.5% fall in banking and financial stocks.

A report by Reserve Bank of India (RBI) forecasted that bad loans could soar due to a rise in pandemic-led debt burdens. Investor sentiments also remained fragile amid the Q1 earnings season.

Overseas, global markets witnessed one more day of decline with as Asian and US stocks closing lower as US-China tensions weighed on investors.

Global stocks have been trading lower since last week tracking growing geopolitical tensions. Besides, the rising number of coronavirus cases on a global scale and worries of a fresh set of lockdowns, growing tensions between the US and China have kept sentiments weak for global equity markets. Traders said markets will continue taking cues from the worldwide trend.

Commenting on today's weak trend, Vinod Nair, Head of Research at Geojit Financial Services said,"Global markets were impacted due to rising US-China tensions and suspected second wave of virus infections. Financials led the losses following a RBI report which expected a surge in bad loans this year. A record number of virus infections in India also added to the uncertainty."

Ajit Mishra, VP - Research, Religare Broking said,"RBI's recent statements over a possible rise in NPAs in FY21 spooked investor sentiments. However, strength in IT and Oil & Gas names managed to restrict the losses for Nifty as it ended lower by 0.6% to close at 11,132 levels. Meanwhile, earnings announcements from select Nifty majors and upcoming derivatives expiry of July month contracts will keep the participants busy. Globally, the US Fed meeting scheduled this week and key economic data announcements will also be on their radar.

In terms of technical indicators, 11,050 and 11,035 has now become key supports, while 11,275-390  is the level of resistance in upside momentum. A move about this will give breakout in an upward direction to extend the move towards 11,350-11,400."

Meanwhile, BEL, Bharti Infratel, India Cements, Kotak Mahindra Bank, Marico, Nippon AMC and Tech Mahindra are among the top companies that will report their April-June quarterly earnings today.

In India, focus of investors is back on surging domestic coronavirus cases that saw a record jump of nearly 50,000 infections over the last 24 hours and came to 1,436,019 by Monday morning, with total deaths standing at 32,812. Worldwide, there are 16,421,952 confirmed cases and 652,308 deaths from the coronavirus COVID-19 outbreak.

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Share Market Highlights: Sensex ends 194 points lower, Nifty at 11,131; Axis Bank, HDFC Bank top losers