Sensex falls over 400 points, Nifty slips as banking stocks drag markets

Banking stocks came under heavy selling pressure on Monday, with the Bank Nifty index falling over 2% in the early trade, as the Reserve Bank of India’s (RBI) recent measures aimed at supporting the rupee came into effect. 

The markets saw a sharp decline, with the Nifty 50 falling by 488.20 points, registering a loss of 2.14%, while the Sensex dropped by 1,635.67 points, marking a steeper decline of 2.22% by 4 pm.

All constituents of the Bank Nifty traded in the red, indicating broad-based weakness across the banking pack. The index declined as much as 2.65%, or 1,386.45 points, to 50,888.15, hitting an intraday low around 10.45 am. It was trading about 3.5%, or nearly 1,700 points, above its 52-week low of 49,156.95.

AU Small Finance Bank declined 4.24%, Axis Bank fell 4.25%, Kotak Mahindra Bank dropped around 4%, while IDFC First Bank slipped 4.17%. IndusInd Bank was down 3.79%, Bank of Baroda fell 3.68%, Yes Bank declined 3.53% and Canara Bank slipped 3.51%. Federal Bank, HDFC Bank and ICICI Bank also traded lower by up to 3%.

The Nifty Financial Services index also fell 2.41%, or 587.75 points, to 23,785.45.

Among sectoral indices, the Nifty PSU Bank index dropped nearly 3%, while the Nifty Private Bank index also declined around 3%. Most banking stocks, including the SBI, Bank of Baroda, Canara Bank, Union Bank and Axis Bank, were trading with losses of up to 4%.

The RBI on March 27 directed banks to cap their net open rupee (NOP-INR) positions in the foreign exchange market at $100 million at the end of each business day. Banks have been asked to comply with the directive at the earliest, but no later than April 10, 2026.

“Authorised Dealers shall ensure that their NOP-INR positions in the onshore deliverable market are maintained within $100 million at the end of each business day,” the central bank said in its circular.

The tighter cap applies specifically to the onshore market. Earlier, banks were allowed to offset positions across the onshore market, non-deliverable forwards (NDF) and currency futures, with overall limits of up to 25% of their capital.

Market participants said the move could lead to an unwinding of existing dollar positions, prompting banks to sell dollars in the near term, which may lend support to the rupee.

However, the directive weighed on banking stocks, with sectoral indices emerging as top laggards in the market.

(This story was taken from syndicated feed and was only edited for style by Gujarat Samachar Digital team)