D-Street indices extend losses for fourth day

Mumbai: Indian shares retreated on Tuesday, extending losses for the fourth straight session amid a selloff in global equities with investors panicking that the fallout from the collapse of two American banks may have a ripple effect on the world economy.

Fresh trouble at Swiss multinational bank Credit Suisse made things worse and resulted in a selloff in financials, especially public sector banks, dragging the Sensex below 58,000 and the Nifty briefly below 17,000.

In a choppy session for Indian equities, the Sensex closed at 57,900.19, down 337.66 points, or 0.58%, from the previous close. The Nifty fell 109.95 points, or 0.64% to close at 17,044.35. In the past four sessions, benchmark indices have declined nearly 5% and erased nearly ₹10 lakh crore in investor wealth.


The weakness in Indian equities mirrors the overnight losses in stocks worldwide.

Asian indices saw sharp cuts on Tuesday.

US, Europe Markets Rebound
European indices partially recovered from the previous day's losses on Tuesday even as Credit Suisse's shares fell over 5% to hit fresh lows after the bank announced it had found "material weaknesses" in its financial reporting processes for 2022 and 2021. US stocks rebounded Tuesday as easing inflation data offset fears over the health of the banking system.

"The market has been confused the last few days (with what is happening in the US) but this is different from what happened in 2008," said UR Bhat, cofounder and director, Alphaniti Fintech.

Bhat said the situation ailing some of the regional banks in the US is asset-liability mismatch and not a credit crisis. US banking regulators should have been more vigilant, he said.

"The crisis needs to be contained nevertheless. And if it is resolved quickly, the fall in equity markets could ease," Bhat said.

Foreign portfolio investors (FPIs) on Tuesday sold shares in the cash segment worth Rs 3,086.96 crore while domestic institutions bought shares worth Rs 2,121.94 crore, according to provisional stock exchange data.

The Nifty PSU Bank index fell 1.9% while the Nifty Bank index fell 0.4%.

Barring the pharma sector, all sectoral indices ended weak.

"Investors should be holding on to their horses but there is a fear - what if the trouble in the US banking system spreads," said Mayuresh Joshi, head equity research, William O'Neil India. "Sentiments are getting hampered and the whole scenario around inflation and future monetary tightening is adding to complexities. It is more confusing for the investors than a week earlier and markets will remain volatile."