The upward movement observed in the previous two trading sessions sputtered out today. With Sensex falling by more than 800 points and the Nifty falling below the 16,900-point level. The Sensex has dropped more than 3,000 points since the Silicon Valley Bank (SVB) crisis started on March 9.
Since then, the forced bailout of Swiss banking titan Credit Suisse and the failure of several regional US banks have increased the threat of a worldwide banking catastrophe.
The entire market capitalization of all BSE-listed companies dropped to Rs 255.43 lakh crore. Further making Dalal Street investors in India about Rs 2 lakh crore poorer.
These might be the reasons for the fall of Sensex:
- Worldwide Banking Crisis:
Investors are also concerned about the cascading effect of the global banking system. As Swiss regulators prevented a financial disaster by negotiating a $3.25 billion takeover of struggling Credit Suisse by rival UBS.
After learning that $17.24 billion of the bank’s Additional Tier 1 debt will wipe down to zero as part of the agreement with UBS, Credit Suisse bondholders became upset.
- Federal Reserve rate:
Investors who blame the Fed for its pace of significant rate hikes over the past year to tame economic activity and inflation will exert pressure on the world’s largest central bank as it meets on November 21 and 22.
The market widely anticipates that the Fed will announce a rate increase of 25 basis points.
- Adani Stocks
Following news that the ports-to-power giant has indefinitely halted construction on its Rs 34,000 crore coal-to-polyvinyl chloride (PVC) facility in Mundra, eight out of ten Adani equities were trading at 4% lower
Adani Enterprises, Adani Power, and Adani Total Gas shares were all down about 4%.
This year, FIIs have spent the majority of their time selling. Around Rs 1,700 crore worth of Indian stocks were sold by foreign investors on Friday, bringing the year’s total sell-off to over Rs 23,000 crore.