Domestic equity benchmarks the Sensex and the Nifty failed to extend the gains of the last two sessions as both ended in the red on March 20 tracking weak global cues.
Investors across the globe have been concerned over the fresh banking crisis in the West while they await the Fed's decision on the rate hikes on March 22.
As Reuters reported, European share markets opened sharply lower and government bonds and gold rallied in a rush for safety on Monday as the emergency weekend rescue of banking heavyweight Credit Suisse left the financial system facing widespread uncertainty.
Sensex opened 216 points lower at 57,773.55 against the previous close of 57,989.90 and fell 905 points to hit the intraday low of 57,084.91.
The index pared losses and closed 361 points, or 0.62 percent, lower at 57,628.95 while the Nifty50 closed the day at 16,988.40, down 112 points, or 0.65 percent.
Mid and smallcaps suffered more than the benchmarks. The BSE Midcap index fell 1.12 percent while the Smallcap index ended 0.99 percent lower.
The overall market capitalisation of BSE-listed firms dropped to ₹255.43 lakh crore from ₹257.53 lakh crore in the previous session, making investors poorer by ₹2.10 lakh crore in a single session.
As many as 387 stocks, including Reliance Industries, Wipro, Mphasis, Max Financial Services and Jubilant FoodWorks, hit their 52-week lows in intraday trade on BSE.
Crude oil prices fell to their lowest in 15 months on concerns risks in the global banking sector may cause a recession that would lead fuel demand to decline and ahead of a potential hike in US interest rates this week, reported Reuters.
Brent Crude traded over 2 percent lower near the $71 per barrel mark.
Top Nifty gainers: Shares of Hindustan Unilever (up 2.51 percent), BPCL (up 2.22 percent) and ITC (up 0.85 percent) ended as the top gainers in the Nifty index.
Top Nifty losers: Shares of Bajaj Finserv (down 4.21 percent), Adani Enterprises (down 3.44 percent) and Bajaj Finance (down 2.97 percent) ended as the top losers in the Nifty index.
As many as 40 stocks fell while 10 rose in the Nifty index.
Most sectoral indices fall
Most sectoral indices ended in the red on NSE, with Nifty Metal falling 2.35 percent. Nifty PSU Bank (down 1.74 percent), IT (down 1.43 percent) and Realty (down 1 percent) fell significantly.
Nifty Bank ended 0.60 percent lower.
On the other hand, Nifty FMCG bucked the trend, rising 0.79 percent. Nifty Media (up 0.12 percent) also ended in the green.
Experts' views on markets
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities pointed out that the pessimist mood prevailing across the global markets triggered a major selloff in the domestic market, as investors are battling a slew of negative news from turmoil in large global banks to macroeconomic concerns and falling commodity prices.
"Traders are also cutting down their equity bets ahead of the US Federal Reserve meeting on interest rate this week, as any aggressive hike in interest rates could spell more trouble for equity markets worldwide," said Chouhan.
Vinod Nair, Head of Research at Geojit Financial Services underscored that the fear of contagion of the financial crisis has kept investors away from the equity markets as the global market faces numerous hurdles.
"Despite Swiss regulators' intervention to protect the global financial system, investor sentiment remained shaky. The market is now awaiting the outcome of the Fed meeting to see how they will respond to the ongoing crisis, particularly in terms of rate hikes. Investors expect the central bank to raise interest rates by 0–25 basis points," said Nair.
Technical views on markets
Rupak De, Senior Technical Analyst at LKP Securities said Nifty formed a hammer-like pattern on the daily chart, suggesting a reversal in the prevailing trend.
"The momentum indicator remained in a bearish crossover with a reading below 40. On the hourly chart, the index has moved higher following a consolidation. The RSI on the smaller timeframe has entered a bullish crossover. On the higher end, the index may move up towards 17,250. On the lower end, closing basis support remains intact at 16,950," said De.
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas observed Nifty witnessed buying interest emerge from the lower end of the downward sloping channel support zone 16,800 – 16,850 and witnessed a sharp recovery. It closed on a negative note though well off the intraday lows indicating buying interest at lower levels.
"On the hourly charts, we can observe that the momentum indicator has triggered a positive crossover which is a buy signal. Thus, we expect the Nifty to continue with the positive momentum which has started during the second half of today's trading session for the next trading session as well. On the upside, the immediate hurdle stands at the 17,145 – 17,200 zone where the previous swing high is placed. The immediate support stands at the lower end of the downward-sloping channel 16,800 – 16,850," said Gedia.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.