Indian stocks hit a 5-month low on worries over the US banking crisis

BENGALURU: Indian stocks hit a five-month low on Tuesday as continued selling in the fourth session of the US banking crisis triggered a global sell-off among lenders.
The Nifty 50 fell 0.65% to close at 17,043.30, while the S&P BSE Sensex fell 0.6% to 57,900.19.
The Nifty 50 index has lost more than 4% in four consecutive sessions as of Tuesday, taking the loss to 5.9% for the year. If the losses hold, it will be the worst quarter since 2020, ending March 31.
The fallout from the collapse of US lenders Silicon Valley Bank and Signature Bank widened despite government efforts to bolster confidence, hitting bank stocks globally.
Concerns about public sector banks managing their treasuries after the US incident led to the sell-off, said Saurabh Jain, assistant vice-president of research at SMC Global Securities.
Meanwhile, assurances from US President Joe Biden and other politicians calmed markets and prompted the Federal Reserve to revise its interest rate outlook.
Many Indian IT services companies have a large exposure to the US banking sector, and due to the current environment, many are resorting to cost-cutting measures, Jain said, and this will affect IT stocks.
While analysts dismissed concerns that Indian lenders were insulated from the US banking crisis, public sector lenders were among the main drags, down 1.9%. IT stocks fell 1.7%, while autos fell 0.9%.
Indian IT services provider Infosys Ltd hit a five-month low, while private lender Bandhan Bank Ltd fell to a 3-year low.
Investors will now look to US inflation data for signs of a rate hike trajectory as the Fed has cut rates during the banking crisis.

Leave a Reply

Your email address will not be published. Required fields are marked *