Irdai’s reform proposal spooks markets
Stock markets tumbled on Thursday with the benchmark index Sensex tanking nearly 1,248 points to settle at an over three-month low due to across-the-board selling, led by financials, metal, auto and oil shares amid a spike in crude oil prices and surging US bond yields.
The 30-share BSE Sensex tanked 1,247.71 points, or 1.67 per cent, to settle near the day’s low levels at 73,580.54, the lowest closing level since June 8. During the day, it plummeted 1,264.33 points, or 1.68 per cent, to 73,563.92. The 50-share NSE Nifty dropped 383.70 points, or 1.64 per cent, to end at a more than five-month low of 23,063.10. As many as 47 Nifty constituents ended lower and three advanced.
Analysts said markets were weighed down by heavy selling in financial shares such as Axis Bank, Bajaj Finance and HDFC Bank after insurance regulator IRDAI proposed changes to the insurance distribution framework, including lower Expenses of Management limits and tighter controls on commissions. Global factors such as high US bond yields and a spike in crude oil prices also dented market sentiment, they added. Among Sensex shares, Bajaj Finance dropped the most by 5.47 per cent, Axis Bank declined 4.67 per cent, Bajaj Finserv 4.06 per cent, InterGlobe Aviation 2.78 per cent, Trent 2.75 per cent, and Mahindra & Mahindra 2.31 per cent.
“On the sectoral front, banking and financials came under significant pressure after IRDAI proposed changes to the insurance distribution framework, including lower Expenses of Management limits and tighter controls on commissions,” Ajit Mishra, SVP — Research, Religare Broking, said.
