After receiving a jolt since Oct 1, markets seemed to be finally finding their feet, after the IL&FS default saga and liquidity crunch at NBFCs.

Last Friday, the Sensex rallied a huge 700 points, and there was follow-up buying on Monday and Tuesday. Just when it seemed "all is well", news reports suggest that real estate company, Supertech has defaulted on its loans.

IndiaBulls Housing Finance has exposure to Supertech and the shares of Indiabulls Housing collapsed, dragging DHFL, Repco Home Finance, CAN Fin Homes all lower. Even a stock like L&T Finance Holdings too crashed a huge 9 per cent on Wednesday, something that we do not see often.

Real estate stock like Indian Bulls Real Estate was at the lower end of the circuit filter and DLF plunged 8 per cent. The markets too ended lower with the Nifty on Wednesday losing 132 points, thanks to fresh worries, now from the real estate sector.

If the real estate sector starts defaulting, then we could see fresh round of selling in banking and NBFC stocks. A report from Bloomberg suggest that Indiabulls Housing may have expsoure of around Rs 500 crores. According to the samee report that the lending was for a specific project and was ring fenced through monthly rentals of Rs 35 to 50 crores.

The problem right now for the markets is that the sentiment is so bad, that even an iota of doubt can send stocks crashing down.

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