Bank Nifty pares early gains, erases record level of over 38k mark on broad-based selloff; Kotak Bank skyrockets 4%

The Bank Nifty gained nearly 1% with a new lifetime high of 38,112.75 in the early deals. However, the bears hovered on majority stocks and that led the index to drop to an intraday low of 37,428.45.

Sep 17, 2021 01:09 IST India Infoline News Service

Bear Versus Bull Silhouette
Bank Nifty pared early gains during the second half of Friday's trading session due to broad-based selloff. Kotak Mahindra Bank was the top gainer and the stock limited the overall downside in the index. Index heavyweight HDFC Bank held steady. The performance comes after the Union Cabinet has approved the central government guarantee of Rs30,600cr to back Security Receipts issued by the National Asset Reconstruction Company Limited (NARCL) aka bad bank.

The Bank Nifty gained nearly 1% with a new lifetime high of 38,112.75 in the early deals. However, the bears hovered on majority stocks and that led the index to drop to an intraday low of 37,428.45.

At around 1.23 PM, Bank Nifty was trading at 37,428.45 lower by 85.90 points or 0.23%.

Kotak Bank was the top gainer surging by nearly 4%. The Kotak Mahindra Group has acquired the vehicle financing loan portfolio of Volkswagen Finance Private Limited (VWFPL). Under the deal, Kotak Mahindra Prime will acquire the passenger cars and two-wheelers portfolio, and Kotak Mahindra Bank will acquire the commercial vehicles portfolio of VWFPL.

HDFC Bank was marginally up, while Axis Bank traded flat. The remainder of the stocks were in the red.

IDFC First Bank and PNB were top bears tumbling by more than 4% each, while Bandhan Bank slipped 3.3%. AU Small Finance Bank and Federal Bank plunged around 3% each. SBI dived over 2%.

RBL Bank and ICICI Bank plummeted more than 1% each, IndusInd Bank was marginally down.

Further, the Finance Ministry stated that NARCL proposes to buy about Rs2 lakh cr worth stressed assets in a phased manner within extant regulations of RBI. Notably, the bad bank plans to acquire these debts through a combination of 15% Cash and 85% in Security Receipts (SRs).

NARCL has applied to the RBI for the license as an Asset Reconstruction Company (ARC). It has been set up by banks to aggregate and consolidates stressed assets for their subsequent resolution. State-owned banks will maintain 51% ownership in NARCL.

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