The failure of Silicon Valley Bank (SVB) in the US came as yet another unpleasant surprise while the Indian stock market was still working to recover from the Adani issue.
As a result of the SVB crisis’s impact on international equities markets, investors have lost Rs 6.6 lakh crore over the course of the last three trading sessions, and the Sensex has fallen by about 2,000 points.
Even though analysts and brokerages claim that Indian banks are well-positioned within a strict regulatory framework, bank stocks were among those that were negatively impacted the most during the day.
Due to today’s negative trading in all sectoral indices, the fear gauge index VIX for India increased 15%.
The main issues that worry investors on Dalal Street are as follows:
Besides the fact that US regulators acted quickly, the failures of SVB and Signature Bank harmed market sentiment. “A financial event, whether favorable or unfavorable, can have an impact everywhere on the known surface of the earth. India is not an exception; there is no such thing as “decoupling” any longer. Our markets will be impacted by any further cascading effect caused by “veteran of Dalal Street Sunil Sanghai.
Global markets
Markets in Asia were imitating Wall Street. The Nasdaq lost 4.7%, the S&P 500 fell 4.5%, and the Dow Jones dropped 4.4% last week. Although the ASX 200 in Australia fell by 0.5%, the Nikkei in Tokyo fell by more than 1%.
Bank stocks decline
Nifty Bank lost more than 2% today as a result of a global collapse in bank stock prices. The biggest loser in the group, IndusInd Bank, was trading more than 7% lower. PSU bank stocks dropped by up to 3.5%.The risk of contagion inside the financial system “appears modest; this is more of a company-specific concern and could harm some start-ups, VCs, and some restricted banks, and also in the immediate term could create panic among investors and banking clients,” Sharekhan said.
Fed with terror
Investors are keeping a close eye on the February consumer price index and the February producer price index, despite the fact that the likelihood of a 50 basis point rate hike has lessened in the aftermath of the SVB disaster. We anticipate larger wagers of 50 basis points and steeper rate hikes if they arrive hotter than anticipated, according to analysts.
Technical
Nifty has been consolidating on the weekly charts for a number of weeks, and prices are steadily lowering their base, signifying negative to sideways momentum. In the daily charts, the index closed last Friday below its short-term averages (9 and 21 EMA). It also produced a bearish engulfing candlestick pattern. As a result of the index’s break below the 17,200 level, its new support is currently located at the 17,000 level.
