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Sensex jumps 500 points as IDFC First Bank shares crash 20%

Manish Kumar
Stock market display showing Sensex gains and a sharp decline in IDFC First Bank share price.

IDFC First Bank Share Price Volatility on February 23

The Indian equity benchmarks, Sensex and Nifty50, started the week on a bullish note this Monday, February 23, gaining significant ground in early trade. Despite the broader market optimism, IDFC First Bank shares witnessed a massive sell-off, plunging 20% after the lender disclosed a major internal fraud involving government accounts.

The domestic stock market showcased a classic “split personality” today. While the benchmark S&P BSE Sensex rallied by over 500 points and the NSE Nifty50 maintained a steady position above the 25,750 mark, specific counters faced intense selling pressure. Investors are currently juggling positive domestic momentum against a backdrop of complex global geopolitical shifts and internal corporate governance concerns.

Why IDFC First Bank shares are crashing

The primary drag on the banking sentiment today was IDFC First Bank. The private sector lender’s stock hit a low of ₹66.80 on the National Stock Exchange (NSE). This sharp decline follows a late-night regulatory filing where the bank revealed a ₹590 crore fraud.

The bank stated that the fraud was committed by certain employees in collusion with external parties. These irregularities were found in accounts belonging to the Haryana government. While the bank has already approached the banking regulator and filed a formal police complaint, the market reacted swiftly to the potential credit and reputational risk.

IDFC First Bank shares

UPL reorganization triggers price drop

Apart from the banking sector, the agrochemical major UPL also faced the heat, with its shares slipping over 8%. The company recently announced a comprehensive “composite scheme of arrangement” aimed at reorganizing its business.

The plan involves integrating Indian and international crop protection segments into a single, focused platform. While management views this as a move to simplify the group structure and unlock long-term value, the immediate market reaction suggests investor caution regarding the execution of such a large-scale corporate restructuring.

Global triggers: The ‘Trump Tariff’ impact

Market volatility is expected to remain high throughout the week due to external factors. US President Donald Trump recently increased tariffs on several countries, including India, to 15%. This move followed a Supreme Court ruling that initially deemed his earlier 10% tariff hike as an overreach of presidential authority.

“The tug-of-war between the US judiciary and the executive branch regarding trade levies has created an atmosphere of uncertainty for emerging markets,” noted a senior equity strategist.

Sectoral performance and winners

Despite the drama in individual stocks, PSU Banks emerged as the top sectoral gainers. The BSE PSU Bank index climbed 1.5%, providing the necessary cushion to the Sensex. Auto and Metal stocks also saw decent buying interest, reflecting a broader confidence in India’s industrial recovery. Conversely, the IT sector remained under pressure, with the Nifty IT index trading in the red as investors reassessed the impact of US trade policies on outsourcing demand.

Macro factors to watch this week

Looking ahead, several key data points will dictate the market’s trajectory:

While the headline indices suggest a “bull run,” the underlying market texture is fragmented. The sharp correction in IDFC First Bank shares serves as a reminder of the idiosyncratic risks inherent in the banking sector. Investors are advised to remain cautious, focusing on sectors with strong domestic moats while keeping a close watch on the evolving trade dynamics between Washington and New Delhi.

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