Sensex Falls Over 350 Points, Nifty Below 16,900 On Crisis In US Banking Sector
Tracking weak cues from global peers amid fresh worries about the banking sector in the US, Indian equity indices opened in the red on Thursday, dragged by losses in banking and IT stocks.
The Nifty 50 index fell 104 points or 0.62% to 16,867, while the S&P BSE Sensex dropped 365 points or 0.63% to 57,190, as of 9.50 am.
From the Sensex pack, Tata Steel and IndusInd Bank were top losers, falling about 2-2.5%. Infosys, Bharti Airtel, Wipro, Tech Mahindra, ICICI Bank and Bajaj Finance also opened with cuts. On the flip side, Power Grid, Titan, Asian Paints, Nestle and HDFC Bank opened with gains.
On the sectoral front, Nifty Metal fell 1.87% and Nifty IT declined 0.73%. Banks, auto, media, realty and oil & gas stocks also opened with cuts. In the broader market, Nifty Smallcap50 fell 0.58% and Nifty Midcap50 dropped 0.31%.
Experts View
“Bad news has shifted from the US to Europe. The refusal of Credit Suisse’s largest shareholder Saudi National Bank to infuse more equity sent the stock plummeting by 30% thereby impacting the European Bank Index which sharply corrected by 8.4%. Since all banks are interconnected, fears of banking contagion are impacting markets,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.
“There are no serious fundamental issues like those during the 2008 financial meltdown. Investors should not panic and wait for this storm to pass. Safety is in fundamentally strong large caps,” Vijayakumar said.
Deepak Jasani, Head of Retail Research of HDFC Securities said, 16747-17166 could be the trading range for Nifty in the near term.
Global Markets
US stocks pared losses late on Wednesday but the Dow and S&P 500 still closed lower, as problems at Credit Suisse revived fears of a banking crisis, eclipsing bets on a smaller U.S. rate hike this month.
The S&P 500 closed with a decline of 0.7%. The Dow posted a slightly steeper drop, while the Nasdaq rose slightly thanks to late gains in tech shares.
Asian stocks slid on Thursday as Credit Suisse became the latest focal point for fears of a banking crisis, leaving markets on edge ahead of a European Central Bank meeting later in the day.
China’s Shanghai Composite fell 0.49%, while Hong Kong’s Hang Seng index dropped 1.51%. Japan’s Nikkei fell 1.08%.
Crude Price Rises
Oil prices rose in early Asian trade on Thursday, clawing back some ground from more than one-year lows hit in the previous session as markets calmed somewhat after Credit Suisse was thrown a financial lifeline by Swiss regulators.
Brent crude futures rose 0.61% to $74.14 per barrel. West Texas Intermediate crude futures (WTI) rose 0.62% to $68.03 a barrel.
Rupee Weakens
The Indian rupee fell 11 paise to $82.76 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declining 0.09% to 104.55 level.