Sensex closes 362 points lower, Yes Bank plunges by 22%

Equity benchmark indices closed substantially lower on Tuesday after an extremely volatile session that witnessed banking and financial stocks losing badly.

Market sentiment took a hit after Moody's warned that banks in India risk seeing their capital severely depleted if there is a rise in corporate defaults.

Deepening crises at Punjab and Maharashtra Cooperative (PMC) Bank and Lakshmi Vilas Bank too dented the market mood.

The BSE S&P Sensex closed 362 points or 0.9 per cent lower at 38,305 while the Nifty 50 slid by 115 points to 11,360.

At the National Stock Exchange (NSE), all sectoral indices were in the red. Nifty realty was down by 4.2 per cent, PSU bank by 3.7 per cent, private bank by 1.1 per cent, IT by 1.5 per cent and pharma by 1.05 per cent.

Among stocks, Yes Bank plunged by over 22 per cent intraday to touch an all-time low of Rs 32.20 amid concerns over its exposure to some troubled non-banking finance companies including Indiabulls Housing Finance.

Managing Director and CEO Ravneet Gill refuted market speculation about the capital and liquidity position of the bank calling such talk speculative, unsubstantiated and irresponsible. But the scrip has been falling even as the private lender has got the from the Reserve Bank of India approval to raise more capital.

Shares of RBL Bank also dipped by 7.8 per cent to touch a fresh low of Rs 303 on the BSE over concerns of its exposure to Indiabulls Housing Finance.

IndusInd Bank slipped by 5.6 per cent while State Bank of India was down by 5.4 per cent.

Another prominent loser was Zee Entertainment which lost by 10.8 per cent to close the day at Rs 236.75. The media house is engaged with financial investors who are reportedly willing to pick its 10 per cent stake.

Indiabulls Real Estate closed 4.9 per cent lower at Rs 43.65. Grasim, Bharti Airtel, Cipla, JSW Steel, and UltraTech Cement too closed in the red.

However, the gainers included Bharat Petroleum, IndianOil, Mahindra & Mahindra, Maruti, and HDFC Bank.

Meanwhile, Asian share prices ticked up as some investors hoped that the fourth quarter of the current calendar will bring progress in resolving the US-China trade war. White House Trade Adviser Peter Navarro dismissed reports that the Trump administration is considering delisting Chinese companies from US stock exchanges.

Japan's Nikkei rose by 0.59 per cent while MSCI's broadest index of Asia Pacific shares outside Japan inched up by 0.24 per cent. The rest of the region also saw gains as with exchange-traded fund inflows.

Chinese markets will be shut for a week to mark 70 years since the founding of the People's Republic of China.