Investors will now focus on the U.S. inflation data, due
later in the day, for cues on the rate hike trajectory amid bets
of the Fed turning less hawkish amid the banking crisis.
($1 = 82.2350 Indian rupees)
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Janane
Venkatraman)
(Updates shares, adds analyst comment)
By Sethuraman N R
BENGALURU, March 14 (Reuters) - Indian shares hit a
five-month low on Tuesday as the relentless selling continued
for a fourth session over a U.S. banking crisis that sparked a
global selloff among lenders.
The Nifty 50 index closed down 0.65% at 17,043.30,
while the S&P BSE Sensex fell 0.6% to 57,900.19.
The Nifty 50 index has lost over 4% in four consecutive
sessions as of Tuesday, taking losses to 5.9% thus far into the
year. If the losses hold, this would be the worst quarter ending
March 31 since 2020.
The fallout from the collapse of U.S. lenders Silicon Valley
Bank and Signature Bank widened despite
government efforts to shore up confidence, hitting bank shares
globally. There are concerns over public sector banks managing their
treasuries after what happened in the U.S., which has led to a
selloff, said Saurabh Jain, assistant vice-president, research,
at SMC Global Securities.
Meanwhile, assurances from U.S. President Joe Biden and
other policymakers did little to calm markets and prompted a
rethink on the Federal Reserve's interest rate outlook.
Many Indian IT services companies have big exposure to the
U.S. banking sector and with the current environment, many will
resort to cost-saving measures, Jain said, adding that is
impacting IT stocks.
Public sector lenders were among the top drags,
falling 1.9%, even as analysts dispelled concerns saying Indian
lenders were insulated from the U.S. banking crisis. IT stocks fell 1.7%, while autos dropped 0.9%.
Indian IT service provider Infosys Ltd hit a
five-month low, while private lender Bandhan Bank Ltd slumped to a 3-year trough.
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