Mr. Mitul Shah - Head of Research at Reliance Securities.
Indian equities ended lower amid weak global cues with weakness across sectors. Nifty was down 1.5%. Broader markets also ended in red as Nifty Mid Cap and Nifty Small Cap lost 2% and 2.2% respectively. All sectoral indices ended in red. Nifty PSU Bank was the major laggard, falling 2.9% followed by Nifty Media and Nifty Pvt Bank which were lower by 2.5% and 2.4% respectively. The crisis in the US banking system has roiled markets globally with the banking sector coming under pressure across markets on fears of contagion.
U.S. stocks extended weekly losses amid concerns over the health of the financial system and a February jobs report that again showed employers adding more jobs than expected. The S&P 500 declined 1.5%, while the Dow Jones fell 1.1%. The Nasdaq lost 1.8%. All the major averages capped off the week with losses. The Dow fell 4.44% to post its worst weekly performance since June. The S&P dropped 4.55%, while the Nasdaq lost 4.71. The selloff was on back of the collapse of Silicon Valley Bank following losses in its bond portfolio, prompting the biggest bank failure since the global financial crisis and sending shockwaves through the banking sector. Trading in several other bank stocks had to be halted after massive fall in their stock prices. Meanwhile, the February Non-Farm Payrolls came at 311,000, far higher than the estimate of 205,000 indicating strong labor market and increasing the probability of 50bps rate hike in the March Fed meeting. Unemployment edged up to 3.6%.
The India CPI for the month of February is due today. This will be the last inflation print before the RBI's next MPC meeting in April. The markets will closely track the macroeconomic data due this week both in India and globally as well as the unfolding crisis in the US banking system.