Sensex, Nifty decline 1 pc on selling in IT, financial shares amid weak global cues

Benchmark stock indices Sensex and Nifty tanked more than 1 per cent on Friday due to heavy selling in IT, financial and oil stocks in line with a weak trend in the global markets.

Besides, lingering concerns over the quantum of the next interest rate hike by the US Federal Reserve hit the sentiment, traders said.

Sliding for the second straight session, the 30-share Sensex tanked 671.15 points or 1.12 per cent to close at 59,135.13, as 21 of its scrips declined. The index opened lower and slid further to touch a low of 58,884.98 in the day.

The broader Nifty plunged 176.70 points or 1 per cent to close at 17,412.90, with 35 of its stocks ending in the red. The index moved in a range of 17,324.35 to 17,451.50 during the session.

''Fall in the select US banks added to the overall Global uncertainty regarding the quantum of the next Fed rate hike.

''US jobs data that would be released late on Friday will also be crucial for upcoming Fed’s meeting as it could also influence the Fed rate decision,'' said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Among Sensex shares, HDFC Bank fell the most by 2.58 per cent, followed by SBI (2.12 per cent), HDFC (2.09 per cent), and IndusInd Bank (2.02 per cent).

Axis Bank, Bajaj Finserv, M&M, L&T, Reliance, Infosys and TCS were among the major losers.

In contrast, Tata Motors, Maruti, NTPC, Sun Pharma, Power Grid and Titan were among the gainers.

Nifty closed in the red for the second consecutive session on Friday, pulled down by negative global cues. At close, Nifty was down 1 per cent or 176.7 points at 17,412.9. Volumes on the NSE continued to be on the lower side. Broad market indices fell less than the Nifty even as the advance-decline ratio fell more to 0.60:1, said Deepak Jasani, Head of Retail Research, HDFC Securities.

''European and Asian equities dropped on Friday as fears over the health of banks' bond portfolios (reflected in troubles emanating at a Silicon Valley-based lender) compounded investors' nervousness ahead of the publication of key US jobs data and next week’s US Fed meet,'' he added.

In the broader market, the BSE Midcap declined by 171.10 points or 0.69 per cent to 24,617.91 while the Smallcap fell by 165.29 or 0.59 per cent to 27,952.11.

BSE Financial Services declined by 1.77 per cent, BSE Bankex by 1.85 per cent, Capital Goods by 1.08 per cent, Realty by 1.07 per cent, Industrials by 0.85 per cent and BSE IT by 0.63 per cent.

On the other hand, BSE Telecom rose by 1.21 per cent and BSE power by 1.08 per cent.

Market breadth was negative as of the total 3,611 scrips traded, 2,099 stocks declined, 1,077 stocks advanced while 105 closed unchanged.

Ajit Mishra, VP - Technical Research, Religare Broking Ltd said markets ended the week with a sharp cut, tracking feeble global cues. The selling pressure was widespread wherein the decline in the banking and financial majors was largely weighing on the sentiment.

''The sell-off in US markets was triggered by a crash of 60 per cent in SVB Financials - a bank that mainly funds startups. This impacted sentiments and banking stocks took a beating on concerns that rising interest rates might trigger loan repayment defaults,'' VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.

Global stock markets declined on Friday ahead of a US job market data amid worries about possible interest rate hikes.

Markets in London, Shanghai, Frankfurt and Tokyo declined. Oil prices were lower.

The global market's cautious attitude towards the probability of a sharper rate hike was exacerbated by further negative signs from the US market. Selling intensified as the market awaited the release of US unemployment and non-farm payroll data, Vinod Nair, Head of Research at Geojit Financial Services, said.

In the US, S&P 500 tumbled 1.8 per cent, Dow Jones Industrial Average shed 1.7 per cent and Nasdaq composite fell 2.1 per cent on Thursday as investors remain anxious about the prospect of more aggressive action by the Federal Reserve to fight inflation with higher interest rates.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday as they sold shares worth Rs 2,061.47 crore, according to exchange data.

The latest India mutual fund data for February reveals that debt funds witnessed increased outflows worth Rs 13,815 crore, while equity funds registered a net inflow of Rs 15,657 crore. This is the 24th month in a row when inflows into equity funds stayed positive. The net inflow into equity funds has been the highest since May, Jasani said.

Expect the volatility to continue next week as well. On the domestic front, February inflation data will be released while on the global front, the ECB meeting would be a key event to watch out for, Khemka said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)