Stocks fell about 1% on Friday as banking and financial shares reflected a slump in global lenders, while IT stocks fell on lingering worries about higher interest rates ahead of key US jobs data.
The Nifty 50 fell 1% to 17,412.90, while the S&P BSE Sensex lost 1.12% to 59,135.13, posting its biggest one-day decline in two weeks. The indexes, which were roughly flat for the week earlier in the session, fell to losses of more than 1% in the holiday-shortened week.
The top-heavy financial index fell 1.8% overnight, its biggest slide since January 27, shortly after the Hindenberg report on conglomerate Adani. In particular, the Nifty bank index fell by 1.87% on the day.
The sell-off in creditors was triggered by a fall in US bank shares, with the Silicon Valley bank forced to raise new capital after losing $1.8 billion after selling a bundle of US bonds to meet investors’ demand for cash.
IT shares lost 0.66%, falling for a third session in a row on worries about rising tariffs in the US and Europe, where most of its clients are based.
The Federal Reserve is likely to raise rates after the latest data showed the labor market was tight and Fed Chairman Jerome Powell cleared the way for higher and faster rate hikes.
“Powell’s comments were a blow to markets that had assumed the end of the rate hike cycle was near,” said Pramod Gubbi, founder of Marcellus Investment Managers.
“If the jobs data shows further strength in labor markets, it will represent a reality check for global markets.”
Adding to the worries in the Indian market is 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 was not edited by NDTV staff and was published on a syndicated channel.)
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India and China contribute more than 50 percent to global growth: IMF