The BSE Sensex lost 1.12% to 59,135.13. (File)
Bangalore:
Shares fell about 1% on Friday as banking and finance stocks mirrored the slump in lenders worldwide, while IT stocks fell on lingering concerns about high interest rates ahead of the main US jobs data later in the day.
The Nifty 50 index fell 1% to 17,412.90, while the S&P BSE Sensex lost 1.12% to 59,135.13, its biggest one-day drop in more than two weeks. Indices, which were more or less flat for the week at the start of the session, slid to losses of more than 1% for the holiday week.
The heavyweight financial index fell 1.8% that day, its biggest drop since Jan. 27, shortly after the Hindenberg report on the Adani conglomerate. Notably, the Nifty banking index fell 1.87% that day.
The sell-off among lenders was fueled by a fall in US bank stocks after Silicon Valley Bank was forced to raise new capital after losing $1.8 billion from selling a package of mostly US bonds to meet depositors’ demand for cash.
IT stocks lost 0.66%, falling for the third session in a row on concerns about interest rate hikes in the United States and Europe, where most of their clients are based.
The likelihood of the Federal Reserve raising rates has skyrocketed after recent data showed that the labor market remained tight and Fed Chairman Jerome Powell paved the way for higher and faster rate hikes.
“Powell’s comments come as a shock to markets, which had assumed the end of the rate hike cycle was near,” said Pramod Gubbi, co-founder of Marcellus Investment Managers.
“If the jobs data shows further strength in labor markets, it will imply a reality check for markets worldwide.”
Adding to the concerns in the Indian market was the return of selling pressure from foreign investors.
Among individual stocks, Axis Bank fell nearly 2% on multiple block deals.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
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