SVB fallout: Sensex tanks 900 points and Nifty tests 17k as US bank’s collapse panics investors
Virendra Pandit
New Delhi: Although the Indian startup ecosystem is relatively free from the contagion’s likely spread across the US after last week’s collapse of America’s 16th largest bank, Silicon Valley Bank, the fears of a banking sector crisis led to Sensex losing nearly 900 points and Nifty testing 17,000 on Monday.
Senses closed at 58,237 while NSE Nifty fell 258.60 points or 1.49 percent to close at 17,154, with 45 of its scrips ending in the red.
Falling for the third straight trading session on Monday, equity benchmark Sensex lost nearly 900 points because of a massive selloff in banking, finance, and auto stocks amid one of the largest US bank failures.
Besides, unabated flight of foreign capital and a weak domestic currency amid global rate hike fears added to the gloom, the media reported.
After gaining 375 points in the early trade, the BSE Sensex could not hold on to its gains and declined 897.28 points or 1.52 percent to settle at 58,237.85 as 29 of its constituents declined while only one advanced. During the day, it hit a low of 58,094.55 and a high of 59,510.92.
IndusInd Bank was the biggest loser in the Sensex pack, shedding 7.46 percent, followed by SBI, Tata Motors, M&M, Bajaj Finserve, Axis Bank, and Infosys. Tech Mahindra was the only winner.
In the broader market, the BSE smallcap gauge dipped 2.08 percent and the midcap index declined 1.82 percent.
The US-based parent company SVB Financial’s Silicon Valley Bank (SVB), which mainly funds start-ups, crashed 60 percent in the US market last week, triggering concerns over the health of banks’ bond portfolios and its possible rippling effects globally.
In Asian markets, Shanghai, Hong Kong, and Seoul ended in the green, while Tokyo settled lower.
European equity markets were trading with significant losses in the afternoon trade.
The Indian rupee declined 10 paise to close at 82.16 against the US dollar on Monday.
International oil benchmark Brent crude declined 1.79 percent to USD 81.30 per barrel. Foreign Portfolio Investors (FPIS) offloaded shares worth Rs. 2,061.47 crores on Friday, according to exchange data.
