RBI’s draft NBFC lending norms drag Sensex, Nifty despite strong Q1 earnings
Financial stocks weakened after the RBI’s draft proposals, while robust corporate earnings and resilient broader markets limited the benchmark indices’ decline.
The Reserve Bank of India's draft proposal to restrict revolving credit facilities for non-banking financial companies (NBFCs) caused significant market volatility on Friday, despite strong corporate earnings from several major players. Bajaj Finance saw the steepest drop of 6 per cent, while Bajaj Finserv and other NBFCs also experienced substantial declines.
The Nifty 50 and Sensex indices both fell, closing at 24,570 and 78,499 respectively, although they ended the week with positive gains. The market's immediate reaction reflected uncertainty surrounding the potential impact of the proposed changes on the growth trajectory of retail-focused NBFCs. Strong earnings from PSU banks and defense stocks helped cushion the losses, and the broader market, led by Auto and IT stocks, managed to stay relatively stable.
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