Bank Nifty Drops 1.7% to Near 54,000, PSU Banks Lead the Decline

Financial Markets Update - March 13

Market Performance

The Indian financial markets experienced significant selling pressure on March 13, with Bank Nifty leading the losses. At 10:15 am, the index was trading 1.75% lower, nearing the 54,000-mark. Union Bank of India, Punjab National Bank, and Canara Bank were among the top losers, declining 2.3%-2.7%. All constituents of the Bank Nifty index were trading in the red.

Private Banks

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In the private banking sector, IndusInd Bank recorded the largest decline, falling 2.6%. This decline is attributed to concerns that higher crude prices could lead to increased borrowing costs, higher bond yields, and reduced treasury gains.

Market Indicators

Support for the Bank Nifty index is placed at 54,000-54,200. The Relative Strength Index (RSI) at 26.71 suggests near-oversold conditions, according to Hitesh Tailor, Research Analyst at Choice Broking.

Bond Market

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The 10-year benchmark bond was quoted at 98.6275 rupees, with a yield of 6.6758%. This is slightly higher than the previous day, attributed to elevated oil prices and rising US Treasury yields.

Currency Market

The Indian rupee hit a lifetime low on March 12, trading at 92.39 per dollar, surpassing its previous all-time low of 92.3575. The currency has declined over 1% since the Iran war started, but has fared better than some emerging market peers due to market interventions by the Reserve Bank of India.