Fear of financial crisis keeps investors away from stock exchanges

Fear of financial crisis keeps investors away from stock exchanges


Both Indian stock exchanges – the and the – went down on Monday owing to the fear of contagion from the financial crisis, said experts.

A number of American banks had failed recently or came under pressure.

“Nifty (at NSE) snapped a two day rise on March 20 and closed in the negative, though after witnessing a sharp rebound from the afternoon lows. At close, Nifty was down 0.65 per cent or 111.7 points at 16,988.4,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

Volumes on the fell compared to the recent average. Broad market indices fell more than the Nifty reflecting higher panic among non-institutional players, he added.

The Sensex of opened at 57,773.55 and closed at 57,628.95 points.

Asian fell on Monday and European were trying to recover after a negative opening as steps taken by central banks to boost liquidity and a deal to rescue Credit Suisse failed to quell investor worries of severe turbulence in the banking sector.

“Investors worry banks are cracking under the strain of unexpectedly fast, large rate hikes over the past year to cool economic activity and inflation and the banking turmoil may cause a recession if it sets off a credit crunch,” Jasani remarked.

Vinod Nair, Head of Research at Geojit Financial Services, said: “The fear of contagion of the has kept investors away from the equity as the global market faces numerous hurdles.”

According to him, the investors sentiment remained shaky despite Swiss regulators’ intervention to protect the global financial system.

The market is now awaiting the outcome of the US Federal Reserve meeting to see how they will respond to the ongoing crisis, particularly in terms of rate hikes. Investors expect the central bank to raise interest rates by 0-25 basis points.



(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Source link