June 11, 2020 / 4:07 AM / a month ago

Sensex, Nifty end 2% lower on delayed telecoms ruling, dour Fed outlook

BENGALURU (Reuters) - Indian shares closed down over 2% on Thursday, led by bank stocks, after the country’s top court extended a hearing on telecom companies’ outstanding dues, adding to downbeat sentiment following a dour outlook from the Federal Reserve.

A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai, India, February 1, 2020. REUTERS/Francis Mascarenhas/File Photo

The NSE Nifty 50 index ended down 2.12% to 9,902, while the benchmark S&P BSE Sensex closed 2.07% lower at 33,538.37.

The indexes extended their losses after India’s Supreme Court asked telecom operators to file replies on a roadmap for payment of government dues, without providing any relief.

Banking stocks came under pressure following the hearing as many banks have large exposure to the telecom sector.

The Nifty banking index and the financial index fell 2.72% and 2.4%, respectively.

HDFC Bank, ICICI Bank and Kotak Mahindra Bank were the top drags, falling between 2.3% and 3.3%. The country’s top lender State Bank of India ended down 5.62%.

IndusInd Bank Ltd was the sole gainer on the Bank Nifty, rising 4.7%.

Shares of telecom operators Bharti Airtel fell 2.7%, while Vodafone Idea tumbled 14.75%.

Indian stocks opened lower as a downbeat U.S. Federal Reserve outlook overnight dented risk sentiment.

“India is indirectly impacted by the (Fed outlook) as we take cues from the global markets. The institutional players were not consistent buyers this week and their interest has waned,” said Deepak Jasani, head of research at HDFC Securities in Mumbai.

Analysts said rising domestic virus cases also spooked markets. As of Thursday, the number jumped to 286,579, including 8,102 deaths.

Reporting by Nallur Sethuraman in Bengaluru; Editing by Sriraj Kalluvila

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