Last updated: March 20, 2023, 9:27 AM IST
Market opens: Indian indices opened negative on March 20 with Nifty below 17,100. Major indices Nifty50 dropped more than 100 points to trade below 17,000 levels, while the S&P BSE Sensex dropped more than 200 points to trade around 57,776 levels.
Broader markets also fell in trading as the Nifty Midcap 100 and Nifty Smallcap 100 indices fell 0.3 percent. The volatility index, India VIX, meanwhile, rose more than 5 percent.
All sectors drowned in the sea of red, with Nifty IT, Nifty Metal, Nifty PSU Bank and Nifty Media indices each falling more than 1 percent.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “Fears of financial contagion from the banking crisis in the US and Europe appear to be largely contained by the rapid response of governments and central banks. The main lesson of the 2008 global financial crisis is that the failure of major financial institutions will lead to systemic problems leading to financial contagion and eventually recession. Lessons have been learned from this crisis and concerted global action has been taken this time – the latest being the acquisition of Credit Suisse by UBS – to contain the crisis. The volatility index in the US around 25 does not indicate panic as in 2008. However, investors can remain cautious and wait for stability. The stimulus to India’s macros from the reduction in the trade deficit and the large drop in Brent crude to $73 is positive from a market perspective.
Global signals
Asian stocks stabilized and US futures rose in relief Monday following a credit suisse bailout over the weekend and a concerted effort by central banks to bolster sentiment, though trading was tense and volatile as contagion fears dogged financial stocks.
Wall Street closed lower on Friday, marking the end of a tumultuous week dominated by an unfolding banking sector crisis and the gathering storm clouds of a potential recession. All three indices ended the session deep in negative territory, with financial stocks falling the most of the S&P 500’s major sectors.
Oil prices rose Monday after their biggest weekly loss in months as UBS struck a deal to buy Credit Suisse and some of the world’s major central banks sought to reassure and stabilize global financial markets.
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