Markets End Lower As Drama Unfolds In Karnataka; Rupee Recovers

Benchmark indices ended the day little changed, after falling heavily in the initial part of trading, as global cues remained weak and heavy drama unfolded in Karnataka over government formation.

The Nifty at one stage in early morning had dropped to as much as 92 points, but, later recovered as Europe opened with gains.

The rupee also recovered and was last seen trading at 67.81. The currency had crossed 68 levels on Tuesday, after the Karnataka government election results.

Banking stocks were extremely subdued, as several banks continued to show a serious drop in profitability or were reporting losses. ICICI Bank, Axis Bank and bank of Baroda lost in trade today.

Punjab National Bank was the worst performer of the day after the bank reported massive losses. The stock ended the day lower by a staggering 10 per cent at Rs 76.95. PNB reported mounting losses. The government owned bank reported a Rs. 13,417 crore fourth-quarter net loss, the worst ever by a domestic bank, after its bad-loan provisions soared due to a massive fraud.

Other banking shares were also weak, and ended lower due to sentimental impact. Reliance Communications shares cracked as much as 10 per cent after the National Company law Tribunal, said that wireless carrier be placed in insolvency proceedings. This may hit Rcom's sale of assets to Reliance Jio to pay debt, pushing the company's share price lower. It ended trade at Rs 10.25, down almost 17 per cent in trade.

Indiabulls Real Estate shares rose, after the company said that it would consider a buyback of shares proposal. The stock ended higher by 12 per cent.

Meanwhile, markets are likely to remain choppy, taking cues from government formation in Karnataka. Hetic parleys are on over government formation in the state are likely to keep markets on the tenterhooks.

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