IndusInd’s ₹1,500 Cr Shock
- 11th March 2025
Aaj Ka Bazaar
The U.S. equity markets suffered significant losses in their first trading session of the week as investor sentiment weakened amid growing concerns over the country’s economic outlook. The uncertainty surrounding trade policies, coupled with subdued consumer confidence, weighed heavily on the markets. All three major indices closed in deep red, with the Nasdaq experiencing the sharpest decline as investors moved to secure profits ahead of an uncertain period. Another factor contributing to the selloff was the slowdown in yen carry trade activity, as market participants withdrew funds in anticipation of a potential rate hike by the Bank of Japan (BoJ). The impact of the dwindling yen carry trade was largely felt by the tech-specific stocks. The negative sentiment spilled over into Asian markets, where both the Nikkei and Hang Seng traded lower. The Japanese market faced additional pressure from a stronger yen and a lower-than-expected Q4 GDP growth estimate. Meanwhile, the Hang Seng index struggled as concerns grew over potential reciprocal tariffs on the U.S., clouding the economic outlook for China. On the domestic front, Indian equities are expected to open on a weak note, mirroring the subdued global sentiment. This outlook is further reinforced by signals from the GIFT Nifty, which also suggests a soft start for the market. We anticipate that market weakness may persist through the trading session, with continued selling pressure from FIIs, extending from yesterday’s trend.
Markets Around Us
BSE Sensex – 73,836.37 (-0.38%)
Nifty 50 – 22,394.65 (-0.29%)
Bank Nifty – 47,834.40 (-0.79%)
Dow Jones – 42,068.42 (0.37%)
Nasdaq – 17,468.32 (-4.00%)
FTSE – 8,600.22 (-0.93%)
Nikkei 225 – 36,585.12 (-1.19%)
Hang Seng – 23,562.09 (-0.94%)
Sector: Bank
Induslnd Bank's ₹1500 Cr Derivatives Shock
IndusInd Bank shares dropped 15% on March 11 after the bank reported discrepancies in its derivatives portfolio, which could reduce its profit by ₹1,500 crore. An internal review found a 2.35% hit to its net worth due to issues in certain account balances. The Reserve Bank of India (RBI) had earlier directed lenders to review their investment portfolios, leading to this discovery. To validate its findings, IndusInd Bank has also engaged an external agency, whose report is expected by the end of March 2025. The impact will likely be recorded in the bank’s Q4 FY25 earnings, primarily through net interest income (NII). Concerns have intensified due to recent leadership changes, including the CFO’s resignation and the CEO’s short extension. Brokerages have reacted differently—some have downgraded the stock, cutting target prices, while others believe the bank can absorb the impact without raising capital. Further pressure on microfinance and margins is expected.
Why it Matters:
IndusInd Bank’s ₹1,500 crore potential loss from derivatives discrepancies raises concerns about its financial stability and credibility. With regulatory scrutiny from the RBI and an external audit underway, investors are wary of further risks. Brokerages have downgraded the stock, signaling possible volatility and caution for traders.
NIFTY 50 GAINERS
SUNPHARMA– 1649.70 (2.37%)
ICICIBANK – 1236.50 (1.78%)
BPCL – 260.57 (1.42%)
NIFTY 50 LOSERS
INDUSINDBK – 720.35 (-20.01%)
INFY – 1648.65 (-3.10%)
WIPRO – 274.20 (-2.39%)
Sector: Aerospace
Bharat Electronics Secure ₹843 Crore Order
Bharat Electronics Ltd (BEL) shares rose nearly 1% to ₹274 on March 11 after securing new orders worth ₹843 crore, bringing its total FY25 order inflows to ₹14,567 crore. The fresh contracts include RF seekers, radar upgrades, vessel and air traffic management systems, and other defence solutions. Despite strong order wins, BEL’s stock has dropped 18% from its recent high of ₹340.50. However, global brokerages remain positive—Jefferies maintains a ‘Buy’ rating with a ₹325 target, expecting a 19.4% upside, while JPMorgan sees the 20% decline as a buying opportunity, forecasting ₹12,000 crore in new orders by March 31. With India increasing its focus on domestic defence manufacturing and BEL’s solid execution, the company is well-positioned for growth. In Q3, BEL reported a 47.3% rise in net profit to ₹1,316 crore and 39% revenue growth to ₹5,756 crore, with EBITDA margins improving to 28.7%.
Why it Matters:
BEL’s ₹843 crore order win strengthens its FY25 order pipeline, bringing total inflows to ₹14,567 crore, highlighting continued business momentum. Despite an 18% drop in its stock price from recent highs, global brokerages remain optimistic, forecasting potential upside with targets of ₹325-₹343. As India ramps up domestic defense manufacturing, BEL is well-positioned to capitalize on rising government spending and sectoral growth.
Around the World
Asian stock markets dropped on Tuesday, led by losses in the tech sector, after Wall Street’s sharp decline over growing U.S. recession fears linked to Trump’s trade policies. The Nasdaq fell 4% overnight, triggering sell-offs across Asia. Japan’s Nikkei 225 hit a five-month low, dropping 1.4%, while TOPIX slid 2%. Major Japanese tech stocks like SoftBank and Panasonic lost over 4%. South Korea’s KOSPI dipped 1.2%, with Samsung and SK Hynix also down. China’s Shanghai Composite and Hong Kong’s Hang Seng fell 0.7% and 1%, respectively, while Alibaba dropped 1.3%. Other markets, including Australia, Singapore, and the Philippines, also saw declines. Meanwhile, Japan’s Q4 GDP was revised down to 2.2% due to weaker consumption, but the Bank of Japan is still expected to raise rates. In contrast, Australian consumer sentiment hit a three-year high, driven by interest rate cuts and lower inflation, boosting market outlooks there.
Option Traders Corner
Max Pain
Nifty 50 – 22550
Bank Nifty – 48900
Nifty 50 – 22522 (Pivot)
Support – 22,367, 22,274, 22,119
Resistance – 22,615, 22,769, 22,862
Bank Nifty – 48313 (Pivot)
Support – 48,027, 47,839, 47,553
Resistance – 48,502, 48,788, 48,976
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