Woeful Wednesday

Nifty50: 17,554 ▼ 272 (-1.5%)
Sensex: 59,744 ▼ 927 (-1.5%)

Dear reader !

Around ₹700,000,000,0000 

That’s ₹7 lakh crore just in case you were counting the zeroes. That is the amount  of money investors lost in the market in a mere 4 days. 

Why did this happen? What caused today’s bloodbath? 

And why can India’s investors still breathe easy? Read all about it here!

Meanwhile, let’s give you an overview of all that happened in the markets today.

• After a weak opening, the markets tumbled.
• Of the Nifty50 universe, 47 stocks declined.
• Escalating geopolitical tension and weak global cues dented sentiments.

All the Nifty sectoral indices ended in the red with Metal (-2.6%) and Media (-1.9%) being the top losers.

What’s trending

⭐ Falling star? Bank Nifty slides below 40,000 

2022’s star performer, Bank Nifty seems to have lost its charm. The index is down nearly 7% so far in 2023. It closed below the 40,000 mark for the first time this year in today’s trading session.

One of the triggers for the fall is market volatility. Concerns surrounding Indian banks, especially public sector banks’ exposure to Adani Group companies also dragged down the index. Investors also expect a possible moderation in the credit cycle going ahead due to a consistent rise in key rates by the RBI. 

⭐ RBI officials concerned about inflation

The members of the Indian central bank have highlighted that inflation remains high and is the biggest threat to India’s macro outlook, according to the minutes of the February’s monetary policy meeting. However, some of them also noted that excessive front-loading of rate hikes carries the risk of over-shooting.  

⭐ Adani Group shares extend fall

Meanwhile, shares of Adani Group controlled companies continue to reel under pressure, with all ten listed companies witnessing a sell-off. Adani Enterprises (-10.5%) was the top loser, declining for the third consecutive day this week. Meanwhile, other group stocks declined in the range of 4-7%.   

⭐ Wockhardt to restructure US business 

Pharmaceuticals major Wockhardt (+1.2%) plans to restructure its US business, which could result in annual savings worth $12 million. Restructuring includes shutdown of its US manufacturing facility. The company also said it has been reducing its long-term external debt every year since FY21. 

⭐ Cyient share shines on new partnership 

Tech solution provider Cyient (+2.1%) has announced a new partnership with UK-based technology firm Thingtrax. The partnership will enable manufacturers across the globe to increase efficiency, drive higher performance and reduce costs.

In Focus

4 reasons why Indian markets tanked today

Around ₹4 lakh crore of investors’ wealth was wiped off today, as bears tightened their grip on Indian markets. While the Sensex crashed 900 points, the Nifty 50 Index lost more than 250 points. 

Here are the four key reasons why the Indian markets tumbled today: 

1. Escalating geopolitical tensions

The ongoing Russia-Ukraine conflict has escalated. Russia has suspended its nuclear treaty with the US, which puts limits on expanding nuclear arms of both the countries. This has sparked concerns of a revival of the cold war and spooked investors globally. It’s important to note that Russia’s invasion of Ukraine had triggered a sharp fall in markets globally last year too. 

2. Weak global cues  

The US markets reported their worst day of 2023 yesterday. With the S&P 500 dropping 2% on Tuesday, Asian markets were also jittery today. Japan’s Nikkei declined more than 1% today, falling to its one month low. These negative global sentiments weighed on Indian markets as well. 

3. Fed rate hike fears 

With inflation rate remaining high, the US Fed could continue to hike rates going forward. The higher-than expected retail inflation numbers in the US and low unemployment figures have fuelled rate-hike fears. This has led to concerns of a prolonged slowdown or recession. 

4. FII outflow 

The rising interest rate scenario could also lead to outflow of foreign investments. This is because a rise in key rates in the US strengthens the dollar and makes US markets relatively more attractive. Through February, foreign investors have been net sellers, offloading shares worth ₹1,621 crore.

The good news? Despite macro challenges globally, India’s growth story is still intact.. In fact, it is expected to be one of the fastest growing economies in the world this year. So chin up and hang in there!

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What is Business Restructuring?

Business restructuring is the process of making significant changes to the organisational and operational structure of a business to improve its performance, efficiency, and profitability. The primary goal of business restructuring is to align the company's resources and capabilities with its strategic objectives and market conditions.

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