markets down on selling in banking stocks

Benchmark BSE Sensex pared its early gains to close down by 344 points at a five-month low, while Nifty slid below the 17,000 level on Wednesday due to selling in banking, financial and telecom stocks. Persistent foreign capital drain from the domestic market and lingering concerns over banks' health and high inflation dented market sentiment, traders said. Falling for the fifth straight session, the 30-share BSE Sensex closed lower by 344.29 points or 0.59 per cent at 57,555.90 with 21 of its stocks ending in the red. After a gap up opening, the index surged over 570 points to touch a high of 58,473.63 amid positive Asian markets in early trade. The stock markets, however, lost steam after a weak opening of European stocks which retreated on fears that the European Central Bank may hike rates by 25 basis points. The Sensex tanked more than 1,000 points from the day's high to hit a low of 57,455.67. Marking its fifth straight day of losses, the broader NSE Nifty declined 71.15 points or 0.42 per cent to end at 16,972.15, with 28 of its stocks ending with losses. "Domestic gains were short-lived, as European markets fell on fears that the ECB would raise interest rates by at least 25 bps at its meeting on Thursday. High-interest rate is the worry of the stock market.