Sensex, Nifty fall for 4th day on the trot on concerns over fallout of US bank failures

Mumbai: Benchmark BSE Sensex declined nearly 338 points to close below the 58,000 level on Tuesday, marking its fourth straight day of losses as auto, IT and financial stocks wilted amid concerns over interest rate hikes and the fallout of failure of two US-based banks.

The 30-share BSE Sensex fell 337.66 points or 0.58 per cent to settle at a new five month low of 57,900.19. During the session, it touched a high of 58,490.98 and a low of 57,721.16.

The broader NSE Nifty declined 111 points or 0.65 per cent to end at a five-month low of 17,043.30, with 38 of its scrips ending in the red.

Sensex tumbled 2,447 points or 4.1 per cent while Nifty tanked 711 points or 4.6 per cent in the four days to Tuesday.

Analysts said relentless foreign capital outflows, investors junking riskier assets ahead of the US Fed policy decision and fears of interest rate hikes to stifle global economic recovery have hit the market sentiment.

Mahindra & Mahindra was the biggest loser in the Sensex pack, declining nearly 3 per cent, followed by TCS, Bajaj Finance, Wipro, Kotak Bank, Tech Mahindra, HCL Tech and Tata Motors.

In contrast, Titan, Bharti Airtel, ICICI Bank and L&T were among the gainers, rising up to 0.93 per cent.

Among sectoral indices, IT declined 1.4 per cent, teck fell by 1.08 per cent, power by 1.06 per cent, realty by 1 per cent, auto by 0.99 per cent, financial by 0.54 per cent and bankex by 0.42 per cent.

Only capital goods index closed marginally up 0.12 per cent.

"The selling continued while the degree of ambiguity over the US Banks reduced due to supportive measures announced by the US FED. The underlying issue of the market is high-interest rates, which will continue to wreak havoc in the world economy. Yields will take time to moderate to the long-term trend given the hawkish monetary policy & high inflation," Vinod Nair, Head of Research at Geojit Financial Services said.

"However, the disruptive development in the US Banks and a slowing economy have created a precursor to presume that yields will peak in the near future, supported by a change in monetary policy from hawkish to neutral, which will diminish the worries of long-term investors," Nair said.

Asia-Pacific markets tumbled and European markets were mixed on Tuesday, after sharp losses seen overnight on Wall Street as investors grappled with the fallout of failed banks in the US and an uncertain path forward for monetary policy, said Deepak Jasani, Head of Retail Research, HDFC Securities.

"Investors will be keeping a close watch on the US consumer price index for February, due to be released Tuesday," he added.

Ajit Mishra, VP - Technical Research, Religare Broking Ltd said that markets inched further lower and lost over half a percent, in continuation to the prevailing trend.

After the initial decline, Nifty tried to recoup losses in the middle but selling pressure in index majors from IT, banking and energy pack pushed the index below the psychological mark of 17,000 levels for a brief intra-day.

On March 12, US regulators closed Signature Bank, just two days after shutting Silicon Valley Bank, following mass withdrawals of customer deposits from these regional banks.

Moody's on Tuesday said that most Asia Pacific financial institutions are not exposed to the failed US banks and are not as susceptible to large losses from debt security holdings as Silicon Valley Bank was, Moody's said on Tuesday.

In Asian markets, Shanghai, Tokyo, Hong Kong and Seoul ended with significant losses.

However, European equity markets were trading on a mixed note in the afternoon trade. Major indices on Wall Street settled lower in the overnight trade.

Meanwhile, the rupee declined 26 paise to close at 82.49 against the US dollar on Tuesday.

International oil benchmark Brent crude declined 1.56 per cent to USD 79.51 per barrel.

Foreign portfolio investors (FPIs) offloaded shares worth Rs 1,546.86 crore on Monday, according to exchange data.

Meanwhile, the wholesale price-based inflation declined to an over two-year low of 3.85 per cent in January on easing prices of manufactured items, fuel and power, even though food articles remained expensive.

Retail inflation dipped marginally to 6.44 per cent in February, mainly on account of a slight easing in prices of food and fuel items though it remained above the Reserve Bank's comfort level of 6 per cent for the second month in a row.