Indian indices turn sour for 2nd day in a row, Sensex sheds 350 pts, banks fall

Investing.com -- Indian equity benchmark indices made a marginally lower opening on Wednesday tracking weak cues from global markets after the credit rating agency Moody's cut ratings on 10 small and mid-sized US lenders, while turning the outlook negative for 11 banks, leading to a broad sell-off on Wall Street in the overnight session, especially banking stocks.

The Indian market slipped deeper into the red in the afternoon session on Wednesday, with equity indices turning negative for the second day in a row ahead of the key US inflation data and RBI’s monetary policy decision due tomorrow.

Headliner Nifty 50 declined 0.42% to 19,488.05 levels, and Sensex shed 343.14 points or 0.52% at 02:55 ET (06:55 GMT). 

The Indian market volatility barometer India VIX surged nearly 4% in the ongoing session and was last seen trading 2.2% higher at 11.6 points.

Banking and financial sectors are majorly exerting pressure on Dalal Street today, while Street heavyweights Reliance (NS:RELI), Divi's Labs (NS:DIVI), ICICI Bank (NS:ICBK), HDFC Bank (NS:HDBK), Hero Moto (NS:HROM), and Apollo Hospitals (NS:APLH) are dragging the Nifty pack down.

Sectoral indices listed under the Nifty umbrella traded mixed, with Nifty Realty and Nifty PSU Bank shedding the most, while Nifty Bank fell 1% in the session.

Investors appear to be refraining from placing aggressive bets ahead of the two major economic events due Thursday.

While most expect the RBI MPC to maintain its policy rates at 6.5% and keep it unchanged, domestic investors would look out for the central bank’s commentary on August 10, 2023.