Chennai, Mar 20 (IANS): Both Indian stock exchanges - the BSE and the NSE - went down on Monday owing to the fear of contagion from the financial crisis, said experts.

A number of American banks had failed recently or came under pressure.

"Nifty (at NSE) snapped a two day rise on March 20 and closed in the negative, though after witnessing a sharp rebound from the afternoon lows. At close, Nifty was down 0.65 per cent or 111.7 points at 16,988.4," said Deepak Jasani, Head of Retail Research, HDFC Securities.

Volumes on the NSE fell compared to the recent average. Broad market indices fell more than the Nifty reflecting higher panic among non-institutional players, he added.

The Sensex of BSE opened at 57,773.55 and closed at 57,628.95 points.

Asian markets fell on Monday and European markets were trying to recover after a negative opening as steps taken by central banks to boost liquidity and a deal to rescue Credit Suisse failed to quell investor worries of severe turbulence in the banking sector.

"Investors worry banks are cracking under the strain of unexpectedly fast, large rate hikes over the past year to cool economic activity and inflation and the banking turmoil may cause a recession if it sets off a credit crunch," Jasani remarked.

Vinod Nair, Head of Research at Geojit Financial Services, said: "The fear of contagion of the financial crisis has kept investors away from the equity markets as the global market faces numerous hurdles."

According to him, the investors sentiment remained shaky despite Swiss regulators' intervention to protect the global financial system.

The market is now awaiting the outcome of the US Federal Reserve meeting to see how they will respond to the ongoing crisis, particularly in terms of rate hikes. Investors expect the central bank to raise interest rates by 0-25 basis points.