IndusInd Bank’s stock faced a steep decline on Tuesday, falling nearly 5% amid news that the bank had enlisted Ernst & Young (EY) to assist in an internal audit of its microfinance portfolio, after a reported discrepancy of Rs 600 crore. This caused significant market jitters, with shares dropping as much as 6.26%. While the bank clarified that EY’s role is limited to aiding its Internal Audit Department (IAD) in a review process, the uncertainty surrounding the situation has raised concerns among investors, impacting the bank’s market performance.
Indian equity markets maintained their upward trajectory for the third consecutive day on Wednesday, bolstered by strong buying in blue-chip banking stocks and fresh foreign fund inflows. The BSE Sensex and NSE Nifty posted gains following a significant drop in retail inflation, which raised expectations of further interest rate cuts. Despite global market weakness, the Sensex closed at a two-week high, fueled by investor optimism over India's economic prospects.
Bank stocks experienced a strong surge on Tuesday, riding the momentum of a broader market rally. IndusInd Bank led the gains with a nearly 7% rise, followed by notable increases in other banking giants such as Axis Bank, HDFC Bank, and ICICI Bank. This upward trend in bank stocks comes in response to recent interest rate cuts, particularly the reduction in lending and deposit rates by major banks, including State Bank of India and HDFC Bank.
