BENGALURU, Could 22 (Reuters) – Indian shares slid on Friday, as banks suffered following the central bank’s resolution to chop coverage charges and lengthen a aid interval for loan repayments by debtors in an effort to include the financial fallout of the COVID-19 pandemic. The Reserve Bank of India’s (RBI) strikes come as a weeks-long lockdown to curb the unfold of the novel coronavirus threatens to push Asia’s third-largest economic system into recession. Whereas some analysts welcomed the steps as much-needed aid for the economic system, banking shares slid as buyers fretted over the affect of the moratorium on banks’ already large pile of unhealthy, or non-performing, loans (NPAs). “For shareholders of banks, it is a negative, because banks are only postponing the pain,” stated Deepak Jasani, head of retail analysis at HDFC Securities. “Investors would want the pain to be recognised upfront rather than pushing it. The NPAs can also get magnified, the longer you wait.” Different analysts stated markets could possibly be disenchanted over the dearth of any bulletins from the RBI on a one-time restructuring of bank loans. The NSE Nifty 50 index was down 1.14% at 9,002.55 by 0630 GMT, whereas the S&P BSE Sensex was down 1.16% at 30,575.15. The Nifty banking index, one of many worst performing sectors this yr, fell 2.5%. The highest six drags on the Nifty 50 have been all banks or finance firms. The nation’s high mortgage lender HDFC Ltd fell 4.1%. India’s benchmark 10-year bond yield fell by 10 foundation factors to five.85% after the speed minimize, earlier than climbing again to round 5.92%. The strikes got here as renewed U.S.-China tensions forged doubt on a commerce deal between the world’s two largest economies, dragging stock markets throughout Asia decrease. In India, the Nifty metals index fell 2.2%. China is among the world’s largest producers and customers of metals. Reporting by Sachin Ravikumar; further reporting by Savio
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