NBFC and housing finance stocks continue to slide on liquidity fears; down up to 8.4%

New Delhi: NBFC and housing finance stocks continued to slide on Monday, falling up to 8.4 percent on fears of liquidity crisis.

Shares of Edelweiss Financial Services plunged 8.43 percent, Indiabulls Housing Finance 7.57 percent, PNB Housing Finance 7.56 percent, Cholamandalam Investment and Finance Company 7.15 percent, Can Fin Homes 6.39 percent and Gruh Finance 5.88 percent on BSE.

Among others, Muthoot Finance plunged 5.84 percent, GIC Housing Finance 5.36 percent, Repco Home Finance 5.30 percent and LIC Housing Finance 2.60 percent.

 NBFC and housing finance stocks continue to slide on liquidity fears; down up to 8.4%

Representational image. Reuters.

Asset management companies' stocks also took a beating, with Reliance Nippon Life Asset Management falling 5.46 percent and HDFC Asset Management Company 2.91 percent on BSE.

In the broader market, the BSE benchmark Sensex tanked 536.58 points to end at over two-month low of 36,305.02 Monday.

"This turmoil, which was triggered last week by housing and NBFC's, continued to trouble the market as panic spread. In spite of assuring statements by key government and institutional leaders, market was concerned about the near-term headwinds like quality and increased cost of funds along with tighter liquidity," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.

Analysts said on Friday, shares of housing finance companies nosedived on rumours of liquidity crunch and scrip of DHFL plunged over 40 percent.

On Friday the 30-share BSE Sensex suddenly tanked 1,127.58 points, or 3.03 percent, to hit a low of 35,993.64 in afternoon trade before staging an equally sharp recovery within minutes.

"Stock markets in India started the week on a negative note and reeled under selling pressure through the day to finally close with losses of nearly 1.5 percent. The slide in benchmark indices was led by selling pressure in banking and NBFC stocks.

"Liquidity crunch fears, consistent selling by foreign investors, rupee volatility, rising crude oil prices and trade war tensions weighed on sentiment," said Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund.

Seeking to calm the nerves of worried investors, Finance Minister Arun Jaitley said on Monday that the government would take all measures to ensure adequate liquidity for non-banking financial companies (NBFCs) and mutual funds.

Updated Date: Sep 24, 2018 18:49:47 IST