Effect of closure of American bank in India, market boom
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Mumbai : The serious impact of the closure of Silicon Valley Bank (SVB), one of America’s largest banks last Friday, is also visible on the stock markets of India. However, analysts had already predicted this, as Silicon Valley Bank has billions of dollars deposited in the accounts of India’s startups and IT companies. According to media reports, the domestic stock markets continued to decline for the third consecutive day on Monday. The Sensex, the major sensitive index of the BSE (Bombay Stock Exchange), closed below 59,000 with a dive of about 900 points. In the US, amid the bankruptcy of Silicon Valley Bank (SVB), the domestic market declined due to heavy selling in the stocks of banking sector, financial and auto sector companies.
Sensex down 1.52 percent
According to traders of the stock market, the foreign capital withdrawal and weak domestic currency also adversely affected the market amid fears of an increase in the policy rate of central banks in various countries of the world. The 30-share Sensex rose 375 points in early trade, but could not maintain the gains and finally closed at 58,237.85, down 897.28 points, or 1.52 per cent. During trading, it went up to 58,094.55 in the lower and 59,510.92 in the higher. Out of 30 Sensex stocks, 29 ended in losses while only one ended in profit. The Nifty of the National Stock Exchange (NSE) also closed at 17,154.30 points, down 258.60 points, or 1.49 percent.
IndusInd Bank suffered the most
IndusInd Bank was the biggest loser in Sensex stocks. It declined by 7.46 percent. Besides, State Bank of India (SBI), Tata Motors, Mahindra & Mahindra, Bajaj Finserv, Axis Bank and Infosys were major losers. Only Tech Mahindra’s stock remained in profit. Bankruptcy of America’s SVB Financial is showing its effect on the market. This bank mainly provides funding to startups. The effect of the bankruptcy of this bank is being seen all over the world.
Investors continue to worry
Navneet Damani, Senior Vice President, Motilal Oswal Financial Services, said that after the bankruptcy of a large bank in the US since 2008, investors are worried and they are preferring to invest in assets considered safe. In other Asian markets, China’s Shanghai Composite Index, Hong Kong’s Hangseng and South Korea’s Cospi were in profit while Japan’s Nikkei was in loss. There was a declining trend in the major stock markets of Europe in the afternoon. Meanwhile, international oil benchmark Brent crude declined by 1.79 per cent to USD 81.30 per barrel. Foreign portfolio investors sold shares worth Rs 2,061.47 crore on Friday, according to stock market data.
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