Sensex plummets over 1,100 points, Nifty sinks below 11,000, Yes bank shares plunges

Sensex plummets over 1,100 points, Nifty sinks below 11,000, Yes bank shares plunges

Indian equity market indices plummeted on Friday in what seems to be a direct effect of RBI superseding the board of Yes Bank and putting a cap on its withdrawal limit.

Yes Bank's withdrawal limit has been capped at Rs 50,000 and former State Bank of India CFO Prashant Kumar has been appointed the administrator. It has also been placed under a 30-day moratorium period.

At around 9:30 am, BSE Sensex was down 1,212.94 or 3.15% at 37,257.67 while Nifty plunged by 353.90 points or over 3 per cent to fall below the sentimentally important 11,000 mark.

While the rapidly spreading coronavirus outbreak was behind continued weakness in domestic stock markets, the primary jolt to investors on D-Street came from the curbs placed on Yes Bank by the banking regulator.

Almost all banking stocks were trading in red at Friday's opening as shares of Yes Bank plummeted over 25 per cent while SBI shares tanked almost 7 per cent. Other companies that opened weaker were TCS, Tech Mahindra, Tata Motors, RIL, ICICI Bank.

The fact that banking stocks were mostly behind Friday's fall in the opening session is proof that the domestic markets were rattled by the decision with regards to Yes Bank.

It may also be noted that BSE has said no Futures and Options (F&O) contracts shall be available in Yes Bank for trading in equity derivatives segment from May 29, 2020, onwards.

While market volatility has spiked over the past few weeks due to the global impact of coronavirus outbreak, the limitations imposed on Yes Bank due to underperformance could put more pressure on the stock market.