Shares in HDFC Bank fell nearly 2.5 per cent, after the bank's provisions rose and so did the net non performing assets and gross non performing assets. The shares of the bank were last trading at Rs 2314, down 2.5 per cent over the previous close.
The shares, which normally do not react sharply, fell, as investors were unhappy with the provisions. Also, given that the bank's stock trades at rich multiples, any scope for disappointment can lead to a sharp sell-off.
Provisions and contingencies for the quarter ending June 30, 2019, were placed at Rs 2,613 crores, against Rs 1,629.4 crore for the same quarter a year ago. Gross non-performing assets stood at 1.40 per cent of gross advances as on June 30 as against 1.33 per cent a year ago.
Meanwhile, the Sensex and the Nifty opened the day sharply lower, led by fall in heavyweights like Reliance Industries, HDFC twins and ICICI Bank.
Indian markets are expected to see further selling pressure in the days to come, on persistent selling pressure. Investors should exercise greater caution, and invest only on declines. Foreign Portfolio Investors have already sold as much as Rs 6,500 crores in the last few trading sessions and they may continue to press sales in the coming days.