Stock market today extended its losing streak for sixth straight session as worries over banking contagion in the developed world continued to hurt sentiments, especially after the US’ Silicon Valley Bank crisis reaching to the European leading bank Credit Suisse. In last six sessions, BSE Sensex has tumbled from 60,348 to today low of 57,158 levels, logging around 5.3 per cent dip in this time. Likewise, Nifty today hit intraday low of 16,850 that is near 5.10 per cent lower from its last week’s Wednesday close of 17,754 levels. Nifty Bank index hit intraday low of 38,618, which is more than 7.10 per cent lower from its 8th March close of 41,577 levels.
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Credit Suisse crisis doing the damage
According to stock market experts, US bank crisis that began with bankruptcy news of Silicon Valley Bank and Signature Bank collapse has now reached Europe as second largest Swiss bank Credit Suisse is facing crisis now. They said that Credit Suisse crisis news has hit global market sentiments and equity market, which is already under US Fed’s rate hike fear went further bearish. They said that Indian banks are insulated from these crisis hit banks but FIIs are fishing out their money from the Indian market as Indian rupee is depreciating at a faster rate. Experts further added that much will depend upon the US Fed’s FOMC’s outcome. If the US Fed officials continue to talk hawkish on interest rate hike, then the situation would further go down.
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On why Indian stock market is nosediving, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “US banking crisis that began with the bankruptcy news of Silicon Valley Bank and Signature Bank has now reached Europe. Credit Suisse, which is second largest Swiss bank is facing crisis as most of its shareholders have declined to pump more money in the bank. So, the global cues, which was already under the grip of bears went further down as a section of Dalal Street is of the belief that Credit Suisse crisis may turn out a big banking crisis in Europe as well.”
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US Fed FOMC meeting in focus
On trigger that may turn out as trend reversal on Dalal Street, Gorakshkar said, “Much will depend upon the outcome of US Fed’s FOMC meeting. If the US Fed decided to keep interest rate unchanged, without any hawkish statement by any of the US Fed officials, then we can expect sharp upside rally on Dalal Street. However, in case the US Fed officials choses to remain hawkish on interest rate hike, then the market may not like this and we may witness more sell off spree post-US Fed’s FOMC meeting scheduled from 21st to 22nd March 2023.”
Gorakshkar said that we can expect some relief rally today as well because today is weekly expiry and those who have short positions are expected to square off their positions.
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Stock market today
On outlook for Nifty today, Vaishali Parekh, Vice President – Technical Research at Prabhudas Lilladher said that after the decisive breach of 17,000 support, Nifty today has strong support zone placed at 16,700 levels. Prabhudas Lilladher expert went on to add that Bank Nifty index has now decisively broken the significant 200 DEMA level of 39,600 and further has got the next major support near 38,200-38,000 zone with overall bias and sentiment getting weaker.
Speaking on outlook for Sensex today, Sumeet Bagadia, Executive Director at Choice Broking said, “Sensex today has slipped into 57,000 to 56,300 range after decisive breach of support placed at 56,500. Trend will remain bearish till the 30-stock index sustains above 58,500 levels on closing basis.”
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Stocks to buy today
Advising positional investors to take advantage of this bear-hit market, Avinash Gorakshkar of Profitmart advised investors to buy quality stocks like Mahindra & Mahindra, State Bank of India (SBI), Canara Bank and Ashok Leyland.
Indian stock market has been nosediving since Thursday last week and market experts are expecting trend reversal from US Fed’s FOMC outcome.
