Due to a significant sell-off in banking, finance, and auto stocks amid one of the largest US bank failures, the equity benchmark Sensex plummeted about 900 points to close below the 59,000 level on Monday, dropping for the third straight session.
A weak home currency and unrelenting capital flight outside amid concerns about rate hikes throughout the world also contributed to the doom, according to traders.
After rising 375 points in the early trade, the BSE Sensex was unable to maintain its gains and fell 897.28 points, or 1.52%, to close at 58,237.85. Of its 30 constituents, 29 were down while only one was up. It fluctuated throughout the day between 58,094.55 and 59,510.92.
45 of the NSE Nifty’s scrips finished in the red as the index lost 258.60 points, or 1.49 per cent, to close at 17,154.30. With a loss of 7.46%, IndusInd Bank led the pack of Sensex losers, followed by SBI, Tata Motors, M&M, Bajaj Finserv, Axis Bank, and Infosys.
Tech Mahindra, on the other hand, was the sole winner. The BSE smallcap gauge and midcap index both fell in the overall market by 2.08 and 1.82 per cent, respectively.
The US-based SVB Financials, which primarily invests in startups, experienced a 60% market decline last week, raising questions about the state of banks’ bond portfolios and potential worldwide repercussions.
“…jitters over the largest US bank failure since the 2008 financial crisis, driving investors to the safe-haven asset,” Navneet Damani, Senior VP – of Commodity Research at Motilal Oswal Financial Services, said.
Shanghai, Hong Kong, and Seoul saw positive closing prices in Asian markets, while Tokyo saw a decline.
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