Freaky Friday sends Sensex down 800 points, Nifty below 200-DMA

The Nifty opened below the 200-day moving average of 17,430 on March 10, its second straight session in the red. Both Nifty and Sensex traded lower by 1.3 percent in early hours of trade, with losing stocks outnumbering the gainers 1:3.

At 9:45am, the Sensex was down over 800 points at 58,978. The Nifty was down 232 at 17,357. About 793 shares had advanced, 1,964 shares declined, and 98 shares remained unchanged. The S&P BSE Power index fared slightly better, though under pressure.

Follow our live blog for all the market action

Markets globally have tumbled since US Fed chair Jerome Powell re-iterated his hawkish stance on containing inflation.

So what’s spooking the markets? Let’s take a look:

Weak global cues: On March 9, Dow Jones closed below its 200-DMA for the first time since November 9, dragged by financial stocks. Wall Street indices traded on track to end the week down by at least 3 percent. Tracking cues from the US, Asian markets opened lower. The Nikkei was down 1.69 percent, Kospi 1.2 percent and the Hang Seng index by 2.46 percent.

Slump in banking stocks: The S&P 500's bank index has hit its lowest level since mid-October. This was largely on the back of tech-industry lender SVB Financial Group launching a share sale to shore up its balance sheet due to declining deposits from start-ups struggling for funding. The stock closed 60 percent lower. In India, Nifty Bank slumped 1.75 percent and Nifty PSU Bank fell 2.18 percent.

US jobs report: US Treasuries gained ahead of what promises to be a closely watched jobs number on Friday. A strong report may lead the Federal Reserve to raise interest rates by 50 basis points on March 22. However, economists expect nonfarm payrolls to rise 225,000 in the month, marking a slowdown from January’s unexpectedly large gain of 517,000.

FII selling: So far this year, foreign investors have sold Indian equities worth $2.52 billion, though they turned buyers in March. In 2022, they liquidated around $17.21 billion worth of Indian equities. FII short positions in the Nifty have also started rising again. From 47 percent at the start of the week, they have climbed to around 60 percent.

Indian inflation: Investors are also eyeing India’s inflation report that is slated to be released on March 13. India's headline retail inflation is expected to have edged down only marginally in February 2023 from January’s three-month high of 6.52 percent. According to a Moneycontrol poll of economists, Consumer Price Index (CPI)-based inflation is expected to have eased only to 6.4 percent last month.