Markets extend losses as banks drag; Sensex erases 2,792 pts, Nifty slips 782 pts in 5 days
4 min read . Updated: 15 Mar 2023, 05:31 PM IST
Premium- In terms of sectoral indices, banking stocks continued to witness a bearish tone. BSE Bankex dipped by nearly 383 points, while Bank Nifty shed nearly 360 points.
- In the broader markets, smallcap indices outperformed however the upside was capped due to broad-based selling pressure.
Markets extended their losses on Wednesday to close near the day's low as banking stocks continue to remain under pressure amidst financial sector worries. Global markets were feeble with a focus on economic data. Domestic equities are in red for the fifth day in a row with Sensex erasing over 2,792 points and Nifty 50 giving up over 782 points in these sessions.
On Wednesday, Sensex closed at 57,555.90 down by 344.29 points or 0.59%. Nifty 50 tumbled by 71.15 points or 0.42% to end at 16,972.15.
Among large-cap stocks on Sensex, Bharti Airtel was the top loser down by 2% followed by IndusInd Bank, Reliance Industries, Hindustan Unilever, HDFC Bank, and SBI with a downside between 1.5% to 1.9%.
In the top gainers' list, Asian Paints took the lead with over a 3% rise followed by two Tata Group stocks Tata Steel and Titan surging by 2.1% and 1.8%. L&T, Power Grid, and Kotak Bank were also up by 1-1.5%.
In the broader markets, smallcap indices outperformed however the upside was capped due to broad-based selling pressure.
In terms of sectoral indices, banking stocks continued to witness a bearish tone. BSE Bankex dipped by nearly 383 points, while Bank Nifty shed nearly 360 points.
On the other hand, capital goods, consumer durables, and metal stocks were among the star performers with indexes on BSE gaining around a percent.
Vinod Nair, Head of Research at Geojit Financial Services said, "the in-line data showing a decline in US inflation provided a gap-up opening in context with the global relief rally, bringing confidence that the Fed would not opt for a harsh rate hike following the turmoil in the banking sector. Broader rate hike expectation has reduced from 50bps to 25bps and there are possibilities that the Fed may even consider not to hike in the March policy meeting. Domestic gains were short-lived, as European markets fell on fears that the ECB would raise interest rates by at least 25 bps at its meeting on Thursday, the high interest rate is the worry of the stock market."
European stocks gave up the previous session's gains and were back in the red zone on Wednesday as investors turned cautious on banking sector concerns. Apart from the Silicon Valley Bank collapse saga, Credit Suisse shares are tanking after its top shareholder ruled out fresh assistance. Main indices in Paris and Milan plummeted by more than 3%, while Frankfurt and London dipped by at least 2.5%. While Credit Suisse's share price dropped by 24% and Societe Generale dipped by roughly 10%.
At the interbank forex market, the rupee gave up its early gains against the US dollar on Wednesday to end at 82.5950. The local unit failed to sustain its upside in the early trade as foreign banks and public sector banks tapped the dollar increasing the greenback's demand. On the previous day, the rupee ended at 82.49.
Going ahead, Rohan Shah-head technical analyst at Stoxbox said, "Nifty closed below 200 DMA for the fourth consecutive day. Intraday traders can look for long opportunities only above the resistance level of 17,250 if it sustains for 15 minutes. Traders can look for fresh shorts only if nifty breaks the 16,900 level & remains below for 15 min to ensure short."
While Rupak De, Senior Technical Analyst at LKP Securities said, "Market bears continued to hold control as the Nifty slipped further, registering its fifth straight day of decline. On the lower end, the index neared the lower band of the falling channel. Going forward, 16950 will likely act as crucial support on a closing basis for the index. Only a close below 16950 may trigger a further correction. On the higher end, resistance is visible at 17150-17200."
In regards to Bank Nifty, Rupak De, Senior Technical Analyst at LKP Securities said, "the index has sustained below the critical short-term moving averages on the daily chart. The momentum indicator is in the bearish crossover. A fall below 39000 may trigger further corrections towards 38800/38500. On the higher end, resistance is visible at 39500."
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