Why stock market is down india
A couple of listed stocks tell the story of the mayhem in the Indian stock market, currently in the grip of a global pandemic. By February-end , it peaked to almost Rs 2, But by March 17, it tumbled nearly 50 per cent. On March 16, it closed its first day with a loss of 9 per cent. This is true for most global stock markets. The average fall in each is within the per cent range in the past few weeks.
Stock market crashes in India
Big bank stocks in India are falling like nine pins. Some investors believe that the gloominess might be overdone. Shares of private sector banks have had a wretched run of late. Investors had already cooled on the sector in recent years due to a confluence of factors: Economic growth which has slowed to a seven-year low , a worrying trend of loans gone sour in the broader banking system and concerns over corporate governance.
HDFC Bank , which traded at 4. Kotak Mahindra Bank , which went from a price-to-book ratio of 5. The severity of the sell-off seems excessive to some investors and analysts, who believe shares of large banks, many of which have sturdy balance sheets and a modest exposure to the most susceptible pockets of the economy, are now looking relatively cheap compared to their fundamentals. In case of these banks, fall in share prices have made valuations attractive.
Despite the near term being volatile, these banks should emerge stronger. In a research note, Credit Suisse pointed out that the Reserve Bank of India's multi-pronged easing measures would add pressure on net interest margins for banks as they would make less money when they lend funds at lower interest rates. The central bank of India also announced a three-month moratorium on all term loans.
Self-employed and small business borrowers will be most impacted and the trickle-down of stimulus benefits may be delayed, Credit Suisse said in a note. Unlike many global markets in Europe and Southeast Asia, India has not banned short selling which is leading to a lot of hedge funds creating panic in the market. Gurmeet Chadha, CEO of Complete Circle Consultants noted that larger banks appear to be doing a better job of tiding over the crisis than their smaller peers.
The recent price action in financials suggests larger, well-run private banks are getting differentiated over smaller private banks," Chadha said. Indian companies typically follow a financial year that runs from April to March. While select business segments of IndusInd Bank have been adversely impacted due to the coronavirus outbreak and borrowing costs are expected to remain high, valuations look favourable, according to Motilal Oswal Securities, a local Indian brokerage which has a buy rating on the stock.
However, foreign investors, such as Hugh Young of Aberdeen Standard Investments, believe things could get worse before they get better. The danger with them was always the valuation and of course general economic sensitivity.
Admittedly even they will hurt a bit in any economic downturn and it looks as though it could be severe. Bottom line is our long-term conviction is intact, but there might well be further short-term pain," Young said in an email. Sign up for free newsletters and get more CNBC delivered to your inbox.
Get this delivered to your inbox, and more info about our products and services. All Rights Reserved. Data also provided by. Skip Navigation. Markets Pre-Markets U. Key Points. Analysts believe that many large private sector banks have sturdy balance sheets and only a modest exposure to the most susceptible pockets of the economy.
VIDEO Squawk Box Asia. Technical factors may also keep bank stocks under pressure. Chadha of Complete Circle Consultant agreed. Related Tags. News Tips Got a confidential news tip? We want to hear from you. Get In Touch. CNBC Newsletters. Market Data Terms of Use and Disclaimers.
Since the founding of the Bombay stock exchange, stock markets in India, particularly in 16 August The sensex continue to languish a good points down for most of the trading session, finally closing at a low of 14,, a loss of In the past two weeks, the New York Stock Exchange halted trading on several occasions. It witnessed the largest single-day fall during this.
Sensex lost 3, Global markets have been on a roller coaster ride ever since the outbreak of Covid pandemic. The uncertainty is enforcing automatic circuit breakers often, however, countries are standing by to keep financial markets open.
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Previous market crashes have shown that stocks that lead the uptick before the peak are usually the ones that correct the most. In the rout, tech stocks took a beating while many industrials suffered in
Stock Market crash
As per the Business Standard , India experienced its first stock market crash in In the preceding years, speculation about the results of the American civil war had led to irrational increases of stocks of new Indian companies. Shares of the Back bay reclamation face value Rs. Money made from cotton was pumped into the stock market driving prices of stocks higher. Banks loaned money to speculators further fuelling the bull run and wealthy merchants like Premchand Roychand dispensed advice that led to ordinary people placing their bets on shares.
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Prataap Snacks informed to the exchanges that it has resumed operations in its manufacturing facilities based in Guwahati, Assam. The plants were temporarily shut due to COVID, however, the company has now restarted operations in-line with the Government of Assam's terms and conditions. European markets are set to open lower Tuesday as investor concerns over the coronavirus outbreak continue and oil market volatility remains in focus. Investors in Europe remain focused on coronavirus developments as economies in the region tentatively start to lift lockdowns, but oil markets have come into sharp focus after dramatic moves in the oil price as the virus continues to dent demand worsening a supply glut. Private banks and the IT stocks were the two main indices that have dragged the market down today. Barring Nifty Pharma, all indices ended in the red today. IndusInd Bank and Bajaj Finance were the top losers. Keep tracking our website to receive more news on the stock market, economy and the corporate world. Apr 21, Explained: India's plan to stockpile crude after the stunning oil price crash.
Indian shares jumped on Friday, tracking a surge in Asian equities, as Reliance Industries gained on yet another stake sale, while investors also awaited economic stimulus for small businesses battered by the coronavirus outbreak. Indian stocks saw broad-based gains on Friday amid rising expectations about an economic stimulus to cushion the impact of the COVID pandemic, with Reliance Industries leading gains after yet another investment into its digital arm.
Sensex, Nifty circuit limits for today. Sensex drops points on aggravating growth worries. Sensex falls points on jump in coronavirus cases; financials top drags. Sensex slips points on fast rising Covid cases, global cues.
Why the stock market is falling?
Big bank stocks in India are falling like nine pins. Some investors believe that the gloominess might be overdone. Shares of private sector banks have had a wretched run of late. Investors had already cooled on the sector in recent years due to a confluence of factors: Economic growth which has slowed to a seven-year low , a worrying trend of loans gone sour in the broader banking system and concerns over corporate governance. HDFC Bank , which traded at 4. Kotak Mahindra Bank , which went from a price-to-book ratio of 5. The severity of the sell-off seems excessive to some investors and analysts, who believe shares of large banks, many of which have sturdy balance sheets and a modest exposure to the most susceptible pockets of the economy, are now looking relatively cheap compared to their fundamentals. In case of these banks, fall in share prices have made valuations attractive. Despite the near term being volatile, these banks should emerge stronger. In a research note, Credit Suisse pointed out that the Reserve Bank of India's multi-pronged easing measures would add pressure on net interest margins for banks as they would make less money when they lend funds at lower interest rates. The central bank of India also announced a three-month moratorium on all term loans.
Sensex crashes 1,375 points: What drove D-Street lower on Monday?
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