Sensex, Nifty Extend Losses Dragged By Banking, Financial Services Shares

The Indian equity benchmarks extended losses after staging a gap down opening on Wednesday mirroring losses in global markets as worries of aggressive monetary tightening amid surging inflation rattled investors' sentiment globally. The Sensex fell as much as 666 points and Nifty 50 index broke below its important psychological level of 17,800. HDFC Bank, HDFC, Reliance Industries, Infosys and Tata Consultancy Services were among the top drags on the Sensex.

As of 3:01 pm, the Sensex was down 486 points at 59,69 and Nifty 50 index declined 130 points to 17,827.

Asian share markets slipped on Wednesday as investors faced up to the possibility of aggressive monetary tightening by the U.S. Federal Reserve to fight inflation, while focus was also on new Western sanctions against Russia over its invasion of Ukraine.

U.S. Treasury yields hit multi-year highs and stock markets were red after Fed Governor Lael Brainard said overnight that she expected a combination of interest rate rises and a rapid balance sheet runoff to take U.S. monetary policy to a "more neutral position" later this year, news agency Reuters reported.

Overnight, stocks closed lower and bond yields jumped Tuesday as remarks by a Federal Reserve governor fueled expectations on Wall Street that the central bank is prepared to more aggressively raise interest rates and take other steps in a bid to tame surging inflation.

The S&P 500 fell 1.3 per cent after shedding a modest early gain. The Dow Jones Industrial Average fell 0.8 per cent and the Nasdaq slid 2.3 per cent.

Back home, Reserve Bank of India (RBI) Governor Shaktikanta Das-led Monetary Policy Committee (MPC) will begin its rate setting meet later today and unveil its decision on Friday, April 8, after a two-day review amid concerns over rising inflation.

Despite spiralling inflation, the Reserve Bank is likely to hold all key rates and retain the accommodative stance at the forthcoming policy review later this week, PTI quoted a Wall Street brokerage.

Nine of 15 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty Private Bank and Financial Services index's over 1.15 per cent decline. Nifty Bank, Auto, FMCG, IT and Realty indices also fell between 0.6-1 per cent.

On the other hand, metal, media and select pharma shares were witnessing buying interest.

Broader markets outperforming their larger peers as Nifty Midcap 100 index rose 0.31 per cent and Nifty Smallcap 100 index slipped 0.25 per cent.

HDFC and HDFC Bank were among the top Nifty losers, both the stocks fell nearly 2 per cent registering second day of profit booking.

Bajaj Auto, Kotak Mahindra Bank, Tech Mahindra, Britannia Industries, Axis Bank, HCL Technologies, ICICI Bank, HDFC Life and Tata Consultancy Services also fell between 1-1.6 per cent.

On the flipside, NTPC, Coal India, UPL, Tata Steel, Bharat Petroleum, Bharti Airtel, Adani Ports, ONGC and Power Grid were among the gainers.

The overall market breadth was positive as 1,797 shares were declining while 1,166 were declining on the BSE.