Bears Take Charge Of D-street As Credit Suisse Acquisition Fails To Calm Investors
Indian equities tumbled on Monday as the contagion risks in the global banking system weighed on investor sentiment. The historic acquisition of Credit Suisse by UBS Group also seemed to fail to calm investors.
At 11:42 am, the 30-share Sensex was down 621.51 points and was trading at 57,368.39, while the Nifty50 was down 189.65 points and was trading below the 17,000 mark at 16,910.40.
On the Sensex, Kotak Mahindra Bank was the only stock trading in green. Top losers on the 30-share pack included Bajaj Finserv, Bajaj Finance, Tata Motors, Tech Mahindra and Tata Steel.
Among sectoral indices, all sectoral indices were trading lower with Nifty Metal slumping the most and was trading 2.36 per cent lower. Nifty PSU Bank, Private Bank were also down 2.17 per cent and 1.05 per cent respectively.
“The steep rise in the dollar index brought on by the sharp increase in interest rates in the USA is the main factor behind the Nifty Metals Index's sharp correction from January highs. Another obstacle is the dread of recession that has been sparked by the recent worldwide unrest. To combat the global financial crisis, however, we are witnessing additional liquidity in the US and Europe,” said Santosh Meena, Head of Research, Swastika Investmart.
“China is also reducing its reserve ratio, which could result in a bounce back in the Nifty metal index. As the atmosphere is still quite hazy, short-term volatility cannot be ruled out,” Meena added.
Among individual stocks, Tata Consumer Products fell over 2 per cent after the company dropped acquisition talks with Bisleri.
"The ongoing scare in global financial markets following the collapse of 2 US banks and another European bank last week has put traders in a spot. With bouts of intra-day volatility likely to be the theme in the coming sessions, investors are likely to follow global trends and maintain caution," said Prashanth Tapse, Senior VP (Research), Mehta Equities.
Volatility index surged to 16.50, its highest since 1 February, the day of the union budget.
