(Updates closing levels)
By Bharath Rajeswaran
BENGALURU, March 10 (Reuters) - Indian shares sank about
1% on Friday, as banking and financials stocks mirrored the
slump in lenders globally, while IT stocks fell on persistent
worries of high interest rates ahead of key U.S. jobs data later
in the day.
The Nifty 50 index fell 1% to 17,412.90, while the
S&P BSE Sensex lost 1.12% to 59,135.13, posting their
biggest one-day decline in over two weeks. The indexes, which
were roughly flat for the week at the start of the session, slid
to losses of over 1% for the holiday-truncated week.
The high-weightage financials index tumbled 1.8%
on the day, in their biggest slide since Jan. 27, soon after the
Hindenberg report on the Adani conglomerate. The Nifty bank
index , in particular, slumped 1.87% on the day.
The sell-off in lenders was sparked by a rout in U.S. bank
stocks after Silicon Valley Bank was forced to raise fresh
capital after losing $1.8 billion selling a package of chiefly
U.S. bonds to meet depositor demands for cash.
IT stocks lost 0.66%, falling for the third
session in a row due to worries about rate hikes in the United
States and Europe, where a majority of their clients are based.
The likelihood of the Federal Reserve raising rates has
jumped after recent data showed the labour market remained tight
and Fed Chair Jerome Powell set the stage for higher and faster
rate hikes.
"The comments by Powell come as a jolt for markets, which
was assuming that the end of the rate-hiking cycle was near,"
said Pramod Gubbi, co-founder of Marcellus Investment Managers.
"If the jobs data demonstrates further strength in labour
markets, it will imply a reality check for markets globally."
Adding to the worries in the Indian market was the return of
selling pressure from foreign investors.
Among individual stocks, Axis Bank fell nearly 2%
on multiple block deals.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by
Dhanya Ann Thoppil, Eileen Soreng and Savio D'Souza)
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