Mumbai: Indian markets closed lower as fresh growth worries emerged after global rating agency Moody’s revised down India’s growth forecast. Sensex lost over 200 points on Monday, led by a fall in banking and telecom stocks over the SC order in the AGR case.
Investors have been worried after Moody’s slashed India’s growth forecast to 5.4 percent for 2020 from 6.6 percent on slower than expected economic recovery. Moody’s also cut 2021 growth projections to 5.8 percent from 6.7 percent earlier.
The market reacted adversely as the apex court had pulled up telcos for not paying the adjusted gross revenue (AGR) liability, leaving the telcos with limited options to get relief from legal or government sources.
According to Motilal Oswal, the recent SC order could have “far-reaching serious ramifications on the telecom and banking sectors with ripple effects on the overall economy”.
Bank of Baroda, SBI, PNB, Yes Bank and RBL Bank fell over 1 to 5 percent while Bharti Airtel and Vodafone Idea also ended in the red.
Vinod Nair of Geojit Financial Services said: “Domestic growth concerns seem to be back in the market as indicated by a recent downgrade by Moody’s. Banks having significant exposure in Telecom players continue to be in the limelight as lack of funds could delay the payments and degrade the quality of the bank's balance sheet.”
“Continuous rise in Coronavirus cases has forced major Asian peers to downgrade their growth outlook which could cause a ripple effect in other nations in the first quarter while recovery is expected from the second,” he added.
Sensex closed 202.05 points or 0.49 percent lower at 41,055.69 after falling as much as 41,030.58. All the sectors ended in red except IT with PSU banks being the biggest loser followed by Pharma, Realty, Metals, and Media.
The banking stocks came under pressure after the Supreme Court refused to accept Vodafone Idea’s proposal to pay adjusted gross revenue dues in a staggered manner. Besides, investors globally continue to trade cautiously as Coronavirus related deaths climbed past 17,000 and total cases jumped to 70,500. (IANS)