Share markets in India have extended early losses and are presently trading deep in the red. Investor sentiments declined after Moody's Investors Service cut India's gross domestic product (GDP) growth forecast for 2019-20 to 5.8% from the earlier estimate of 6.2%.

Sectoral indices are trading mixed with stocks in the realty sector, banking sector and finance sector witnessing maximum selling pressure, while energy stocks and telecom stocks are witnessing buying interest.

The BSE Sensex is trading down by 311 points (down 0.8%), while the NSE Nifty is trading down by 84 points (down 0.7%). The BSE Mid Cap index is trading down by 0.8%, while the BSE Small Cap index is trading down by 0.4%.

The rupee is currently trading at Rs 71.06 against the US$.

Market participants are tracking TCS share price and IndusInd Bank share price as these companies are set to announce their September quarter (Q2FY20) results later today.

In news from the banking sector, Lakshmi Vilas Bank (LVB) share price is witnessing selling pressure today after the Reserve Bank of India (RBI) rejected the proposed amalgamation of Indiabulls Housing Finance with the bank.

The stock of the private sector lender hit an all-time low of Rs 25.65 and is presently locked in 5% lower circuit limit.

On Wednesday, the RBI said the application for the voluntary amalgamation of Indiabulls Housing and its subsidiary Indiabulls Commercial Credit with LVB could not be approved.

Indiabulls in its statement to the stock exchanges said, "now that the merger will not happen with Lakshmi Vilas Bank, the uncertainty of the last five months on the business is lifted and the company will focus on its growth of the core business of housing finance."

The company also said it was considering a buyback of equity shares of the company, for which it has called a board meeting on October 14.

In June this year, the Competition Commission of India (CCI) had given its nod to the proposed amalgamation.

Indiabulls Housing Finance and LVB had proposed a merger between the two in April in a share-swap deal under which LVB shareholders would get 14 shares of Indiabulls Housing for every 100 equity shares held in the bank.

Note that shares of LVB have been hitting the lower circuit limit of 5% since the past eight consecutive sessions, after the RBI initiated prompt corrective action (PCA) against the Chennai-based bank.

The RBI's decision to bring the bank within the PCA framework sets ceilings and limits on big-ticket and high-risk lending.

Under the PCA, which was introduced in December 2002, the RBI imposes several restrictions on a bank, from lending to the distribution of dividends, etc. The measure is usually aimed at improving the performance of the bank.

Speaking of private banks, if there is any private sector lender that has severely underperformed in the last two years, it has to be Lakshmi Vilas Bank (LVB).

Look at the chart below.

Lakshmi Vilas Bank Down 60% from Its 2017 High

Here's what Sarvajeet Bodas, editor of Smart Money Secrets wrote about it in one of the editions of The 5 Minute WrapUp...

• LVB declined by more than 50% in the last 2 years compared to the overall BSE Bankex showing gains of about 30%.
  
  Here's another interesting data.
  
  If you look at the shareholding pattern of LVB during this 2-year time frame, retail investors (Individual share capital up to Rs. 2 Lacs) have increased by 15%. The number of shares owned by them increased by 24%.

As per him, this is a typical example of retail investors catching a falling knife!

Moving on to news from the telecom sector, shares of Bharti Airtel and Vodafone Idea are trading higher today after Reliance Jio on Wednesday announced that it will be charging an Interconnect Usage Charge (IUC) from customers for calls made to the other networks.

Reliance Jio announced that all calls made to other mobile operators will be charged at the prevailing IUC rate until the regulator abolishes the IUC charge.

Reports state that this move will be positive for telecom companies.

The charge is fixed by the Telecom Regulatory Authority of India (TRAI) and is currently at 6 paise per minute.

In other news, Bharti Airtel on Wednesday said that it has raised US$ 750 million from investors based in Asia, Europe and the US through a hybrid financial instrument.

Shares of the company hit a 52-week high of Rs 385 on back of the above news.

Bharti Airtel share price and Vodafone Idea share price are presently trading up by 5% and 6.2%, respectively.