After a sudden crash during mid-day trading on Friday, Indian stock market investors continue to be cautious and on Monday the stock market remained in negative territory, with bank stocks bearing the brunt of the squeeze.
The benchmark Sensex of the Bombay Stock Exchange fell over 100 points in opening trade. The Nifty 50 of the National Stock Exchange traded 26 points, or 0.23%, lower at 11,117.10 points. Weak Asian cues also added to the negative sentiment.
Most banking stocks such as ICICI Bank, Kotak Bank, IndusInd Bank, SBI, along with other index heavyweights such as Bharti Airtel, Maruti Suzuki, M&M, and Tata Motors, witnessed heavy selling pressure on the Sensex index.
In order to bolster market sentiment, Indian Finance Minister Arun Jaitley tweeted on Monday that the government will take all measures to ensure that adequate liquidity is provided to Non-Banking Financial Companies, mutual funds and small and medium-sized enterprises.
The Reserve Bank of India plus the market regulator, the Securities and Exchange Board, said they were closely monitoring developments in financial markets and ready to take appropriate steps if needed.
On Friday the Sensex crashed nearly 1,500 points over rumors of a default by mortgage lender Dewan Housing Finance Ltd and uncertainty surrounding the future of Infrastructure Leasing & Financial Services Ltd (IL&FS) after it defaulted on debt obligations.
Shares of other home financiers also slumped on Friday following the rumors but later recouped some of their losses after Dewan Housing denied that it had defaulted on payments.
The government hinted on Monday it may facilitate the sale of IL&FS assets as lenders look to monetize them to stem a financial crisis.