Stock indices rallied slightly on Monday, reversing two days of losses as global authorities took steps to contain banking turmoil, allaying some of the contagion fears.
The Nifty 50 index closed 0.24% higher at 16,985.70 and the S&P BSE Sensex rose 0.22% to 57,653.86. Broader Asian stock indices were largely subdued.
Benchmarks rose nearly 1% in intraday trading before slipping gains into a volatile session. The volatility index rose to an intraday high of 16.09 before closing at 3.45pm, a one-week high.
Five of the 13 major sector indices rose, with Nifty Pharma leading gains up 1%.
Meanwhile, news that First Citizens BancShares agreed to buy the collapsed Silicon Valley Bank, and that the US Federal Reserve and the European Central Bank said they are closely monitoring the impact of banking stress, sent markets an uneasy calm .
Domestically, a media report said India’s state-run lenders will submit a detailed, scenario-mapped plan of various risks to the government within two weeks.
Financial institutions and banks changed little on Monday. Indian lenders are expected to remain resilient in the wake of the global turmoil, according to analysts.
“Expect some stability in Indian markets following swift regulator action on the banking crisis so far in the West,” said Anita Gandhi, director of Arihant Capital Markets.
“However, continued selling by foreign portfolio investors (FPIs) is dampening sentiment,” she added.
Since SVB’s bankruptcy on March 9, FPIs have wiped Indian stocks off the map in 10 of 11 sessions.
Among individual stocks, Reliance Industries rose more than 1.5% after Kotak Institutional Equities called the stock a “convincing” buy.
Grasim’s shares gained nearly 2% after leasing 220 acres of land from Century Textiles for 2.55 billion rupees. The company plans to set up production facilities on land.
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