Indian indices fell around a percent on Monday following losses across global peers as investors remained concerned about aggressive tightening by US Fed. Back home, losses across all key sectors IT, FMCG, and metals contributed to the losses, however, banking stocks capped some losses.
The Sensex lost as much as 840 points in intra-day deals to hit its day's low of 56,356 while the Nifty fell 283 points to its day's low of 16,888. The Sensex ended 617 points lower at 56,580 while the Nifty settled 218 points lower at 16,954.
Broader markets underperformed benchmarks, with the Nifty Midcap and Smallcap indices declining 1.9 percent and 1.4 percent, respectively.
"Globally markets turned weak with the big cut in the mother market US last Friday. Markets are worried about the increasing hawkish messages from the Fed which indicate higher-than-expected rate hikes by the Fed this year. There are concerns that aggressive monetary tightening might even push the US economy into a recession in 2023. These fears are impacting risky assets," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said in a note.
India VIX, which is the volatility index of the Indian markets, surged nearly 16 percent in today's session.
On the Sensex, banking stocks were mainly trading in the green. Four of the top 5 gainers were from the banking space - HDFC Bank, ICICI Bank, HDFC, Axis Bank, and Bharti Airtel rose the most. Tata Steel, NTPC, Tech Mahindra, Reliance Industries and Titan were the top losers.
Meanwhile, on the Nifty also, banking stocks rose amid overall weak sentiment. Bajaj Auto, HDFC Bank, ICICI Bank, Axis Bank and HDFC were top gainers.
Meanwhile, Coal India and BPCL were the top losers, down over 6 percent each. Tata Steel, Hindalco and SBI Life fell between 3-4.5 percent.
Among sectors, all sectors were in the red. The Nifty Realty index lost the most, down over 3.5 percent. Meanwhile, Nifty Metal shed around 3 percent. Nifty Pharma, Nifty IT and Nifty FMCG also slipped around 2 percent each. Meanwhile, Nifty Bank provided some support to the markets.
Vijayakumar added that India cannot be immune to a probable global market correction. But India is relatively resilient. Monetary tightening in India would be mild compared to that of the US. There are indications of a good recovery in the economy.
ICICI Bank rose in a weak market on the back of stellar March quarter earnings. According to Vijayakumar, ICICI Bank's excellent results also reflect the improving asset quality and growing credit demand in the banking sector. Top-quality banking stocks are at buyable valuations. Sharp market corrections caused by global factors can be used to buy quality names in a calibrated manner, he further stated.