Domestic markets end in red despite late recovery, IT, banking stocks drag

By Koustav DasBenchmark stock market indices started the week on a sluggish note after growing fears of a full-blown global banking crisis spooked investors. While both indices recovered some lost ground, they ended the trading session in negative territory.

The S&P BSE Sensex ended 360.95 points lower at 57,628.95, while the NSE Nifty 50 settled barely above 17,000 after falling nearly 1 per cent. Broader markets reflected the weak sentiments as volatility spiked sharply.

Most sectoral indices ended in the negative zone, with heavyweights Nifty IT, Nifty Metal and Nifty Bank leading the losses. The Nifty FMCG was the only sectoral index that saw some gains.

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Some of the top gainers on the Nifty 50 index were Hindustan Unilever, BPCL, ITC, Grasim and Kotak Mahindra Bank. On the other hand, the top drags on the 50-share index were Bajaj Finserv, Adani Enterprises, Bajaj Finance, Hindalco and Tata Steel.

Investors remain worried about the possibility of a deepening global banking crisis, even after the Swiss central bank brokered a deal to rescue one of the world’s top lenders, Credit Suisse.

While the deal provided some support to global markets, banking stocks are likely to remain under pressure, as uncertainty remains over the ongoing global turmoil.

Investors will now shift focus to the US Federal Reserve’s policy decision on Wednesday, where it is expected to hike interest rates by 25 basis points to tackle inflation.

However, investors are still uncertain whether the Fed will hike interest rates as it could turn up the heat on small and mid-sized banks.

Domestic markets are also under pressure due to the continued selling by foreign institutional investors (FIIs). The ongoing banking turmoil around the globe could intensify foreign selling as sentiments have taken a big hit.