SENSEX plunges over 500 points, NIFTY50 ends below 24,100 dragged by HDFC Bank

The Indian equity benchmarks ended sharply lower on Thursday, August 27, dragged down by HDFC Bank, the country's largest private sector lender, after reports suggested that it is facing a securities fraud class action lawsuit in the US over allegations that it failed to disclose material information to investors.

The SENSEX fell 539 points to close at 76,934 and NIFTY50 index dropped 117 points to end at 24,091.

HDFC Bank was the biggest drag on the SENSEX, it alone wiped out 194 points from the SENSEX, data from BSE showed.

As per an NDTV Profit report, the bank said that in the United States, these types of shareholder lawsuits are incredibly common after a company experiences a stock drop, and many companies listed in the US routinely defend these lawsuits each year. “The Bank believes the lawsuit is without merit and intends to vigorously defend itself,” it further added.

The lawsuit, filed in the US District Court for the Southern District of New York, alleges that HDFC Bank made materially false or misleading statements and failed to disclose information related to alleged payments of around ₹45 crore that were reportedly routed through its marketing budget to induce deposits from Maharashtra State Road Development Corporation (MSRDC), according to media reports.

Reliance Industries, Bharti Airtel, Mahindra & Mahindra, Infosys, State Bank of India, ITC and NTPC were also among the top drags on the SENSEX.

Selling pressure was broad based as 11 of 15 major sector gauges compiled by the National Stock Exchange (NSE) ended lower led by the NIFTY PSU Bank index's nearly 1% fall. NIFTY Bank, Financial Services, Metal, Media, IT, PSU Bank and IT indices also fell between 0.3% and 0.8%.

On the other hand, healthcare, pharma and consumer durables shares witnessed buying interest.

Mid- and small-cap shares ended on a flat note with a negative bias as NIFTY Midcap 100 and NIFTY Smallcap 100 indices slipped 0.1% each.

Bombay Burmah Trading Corporation shares rose as much as 15% to hit an intraday high of ₹1,635 on August 27.

The stock came under buying interest after it informed exchanges that it received a favourable judgement from the Supreme Court.

ICICI Prudential Asset Management Company (AMC) stock fell 5% as investors reacted to the promoter group entity Prudential Corp. selling a 2% stake in the company on the open market.

Tata Power shares declined 4% after Singapore International Commercial Court dismissed the company’s challenge against a $490 million arbitration award to Kleros Capital.

Although the Singapore court dismissed the appeal on August 26, Tata Power now plans to submit another appeal against the latest order within the designated 28-day period, challenging the decision to uphold the arbitration award.

Hindalco was top loser in the NIFTY50 index, the stock fell 2.75% to close at ₹1,024. HDFC Bank, Mahindra & Mahindra, Shriram Finance, HCL Technologies, Grasim Industries, Bharti Airtel, Reliance Industries, Jio Financial Services, IndiGo and NTPC also fell between 1% and 2.23%.

On the flip side, Adani Enterprises, Kotak Mahindra Bank, Adani Ports, Cipla, Bharat Electronics, Tata Motors PV, ICICI Bank, Tech Mahindra and Eicher Motors were top gainers in the NIFTY50 index.

The overall market breadth was negative as 2,160 shares ended lower while 1,341 closed higher on the NSE.