The Sensex and Nifty fell in early morning trade with banking stocks resuming decline for the second day after chiefs of private sector lenders ICICI Bank and Axis Bank were summoned for questioning by SFIO in the PNB fraud case on Tuesday. While the Sensex opened 113 points or 0.34% lower, the Nifty fell to 10,200 level down 48 points on Wednesday.

Bank Nifty fell 208 points to 24,245. The BSE bankex was the top sectoral loser falling 246 points or 0.89% at 27,305 level. Adani Ports (1.99%), ICICI Bank (1.76%) and SBI (1.36%) were the top Sensex losers.

“We believe that the correction in the over-valued mid cap space is not yet over – minimum another Rs 4 lakh crore may be wiped out from the overall market due to further corrections in the over-valued small and mid-cap (SMC) stocks,” according to Equinomics.

Market breath was negative with 343 stocks rising against 822 falling on the BSE. 53 stocks were unchanged.

The rupee opened slightly stronger at 64.89 level as dollar weakened on Wednesday. The currency on Tuesday rose to a fresh one-week high of 64.96, surging by 16 paise on steady unwinding of dollars by exporters and corporates.

On Tuesday, the Sensex closed 429 points or 1.27% lower at 33,317, the Nifty fell 109 points or 1.06% to 10,249 level. Banking stocks took the plunge with the BSE Bankex falling 401 points or 1.44% to 27,551 level. SBI (2.77%), ICICI Bank (2.64%), Bank of Baroda (2.45%) were the top losers on the index after the news of SFIO summoning the chiefs of two private lenders came in. Bank Nifty fell 370 points or 1.49% to 24,448 level. Other major sectoral losers were BSE auto (1.36%) and capital goods indices (1.31%).

Global stocks

Global stocks and the dollar slumped on Wednesday after a key advocate for free trade in the White House announced his resignation, fanning fears President Donald Trump would go ahead with tariffs and risk a trade war. White House economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the Trump administration, said on Tuesday he was leaving.

S&P 500 futures dropped more than one percent and set the downbeat tone for Asia.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.25 percent.

Australian stocks fell 0.75 percent and Japan’s Nikkei retreated 0.2 percent.In Asia, Nikkei was down 0.19% and Hang Seng was trading 0.21% lower. Shanghai SE Composite was trading 0.14% higher at 3294 level.