With the disappointing jobs growth data dealing a blow to the US markets on Friday and the French President-elect Socialist, Mr Francois Hollande, indicating a reversal of austerity policies pursued by his predecessor, the Asian markets went into a tailspin this morning.
This, in turn, dealt a blow to Indian markets already reeling under concerns over issues like GAAR (General Anti-Avoidance Rules) and Mauritius tax treaty review.
The fact that the discussions on the Finance Bill will begin today in the Lok Sabha, and the uncertainty as to how the European markets will respond to the French elections results when they open later in the day, appear to have made the Indian investors jittery.
The Finance Minister may come out with clarifications today on issues that spooked the FIIs before voting takes place tomorrow.
All this has led to a sharp downward journey of the markets and some of the major losers this morning were the banking stocks.
SBI dived by Rs 85 to trade at Rs 1,910 and Axis Bank dipped to Rs 979.00, a loss of Rs 30.85.
ICICI Bank was another major loser, shedding Rs 28.25 to trade at Rs 805.70, and BoB was down to Rs 664.00, a loss of Rs 23.05.
All the 14 bank stocks on the BSE Bankex were down. But the extent of losses in the case of other bankex constituents was less — under Rs 10.
Bank of India was trading at Rs 322.50, a loss of Rs 5.70, Canara Bank was trading at Rs 422 down by Rs 4, Federal Bank slipped by Rs 7.05 to to Rs 406, HDFC Bank was down to Rs 527.80, a loss of Rs 8.95 and IDBI Bank was trading at Rs 93.65, a loss of Rs 2.10.
However, IndusInd Bank and Kotak Mahindra Bank were able to minimise the losses. IndusInd Bank was trading at Rs 320.05, a loss of 40 paise and Kotak Mahindra Bank shed a mere Re 1 to Rs 563.75.
The biggest BSE sectoral index loser was the bankex losing more than 300 points.
Major Asian indices such as Nikkei, Straits Times and Hang Seng are down sharply. This had an impact on Indian indices.
The Nifty was trading below 5,000 points and the Sensex has shed nearly 300 points in the morning trade. But key to market trends later in the day may be how the European markets respond to the latest political developments there.