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Nifty, Sensex Dip In Line With Asia; IT Stocks Tumble

Zee, which denied any involvement with the large cash deposit transactions, said promoter stake sale and Essel Group’s stressed asset sale plans are still on track

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Indian shares fell marginally on Tuesday, tracking broader Asian markets as concerns over a Sino-U.S. trade war resurfaced, while domestic non-banking finance companies (NBFC) traded in the red amid financial developments of Essel Group. 

NBFCs including Indiabulls Housing Finance Ltd and Dewan Housing Finance Corp Ltd extended losses and were down 5.8 percent and 4.4 percent, respectively.

Last week, a news report alleged that Zee Entertainment Enterprises Ltd’s promoter Essel Group may figure in a probe linked to demonetisation-led deposits of 30 billion rupees ($421.82 million).

Zee, which denied any involvement with the large cash deposit transactions, said promoter stake sale and Essel Group’s stressed asset sale plans are still on track.

Essel Group is among the larger borrowers from domestic mutual funds, and mutual funds’ NBFC exposure is still high, research firm Credit Suisse said in a note.

Mutual funds’ exposure to Essel Group is through more than 100 schemes, and concerns about the group may, therefore, lead to the second wave of risk aversion in domestic debt fund and volatility in their flows, the note added.

However, analysts said investors chose to maintain a cautious stance ahead of the fiscal budget due on Feb. 1.


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