Sharp gains in Reliance Industries (RIL) and Tata Consultancy Services (TCS) helped offset some losses. RIL gained 2.5 per cent and TCS added 1.6 per cent — both making a 134-point positive contribution to the Sensex.
RBI Governor Shaktikanta Das, in an interview to a news
agency, said the central bank had detected signs of fragility in some housing finance and other non-bank lenders. He said RBI was working closely to prevent a crisis in a systemically crucial non-bank finance company.
The Bank Nifty index fell 1.63 per cent, while Nifty Financial Services index dropped 2.6 per cent. Markets
have already been in a fragile state since the Budget on July 5, where the finance minister announced an increase in tax surcharge for foreign portfolio investors (FPIs) with trust structure.
Since July 5, the broader markets have seen a 6 per cent correction with India’s market cap declining by nearly Rs 9 trillion.
The fall comes amid continuous selling by FPIs, who have been spooked by the high tax and government’s refusal to provide any relief. So far this month, FPIs have pulled out nearly $1.3 billion (over Rs 9,000 crore) from domestic equities.