Manic Monday

Nifty50: 16,988 ▼ 111 (-0.6%)
Sensex: 57,628 ▼ 360 (-0.6%)

Hi there,

Happy world happiness day to you!
We live in an age of virus outbreaks, war and economic turmoil. While it is convenient to presume that the world, as a whole, is an unhappy place right now, it is apparently not true.
The UN Sustainable Development Solutions Network has released its 10th edition of the World Happiness Report. The report says that global happiness has (surprisingly) not taken a hit in the three years of the pandemic!
Wanna know which country is the happiest in the world? It is Finland – for the sixth time in a row!
India, meanwhile, ranked 125 out of 136 countries. Sadly, no happy news from markets today as well.

• The markets ended lower in yet another choppy session.
• Out of the Nifty50 pack, 40 stocks declined.
• Weak global cues impact the Indian markets.

All the Nifty sectoral indices ended in the red, except FMCG (+0.7%) and Media (+0.1%). Metal (-2.3%) and PSU Bank (-1.7%) were the top losers.

What’s trending

⭐ Global banking crisis dents sentiments 

The Indian markets tumbled today, following weakness in the global equity markets. The US and European banking crisis seems to be making investors nervous. Besides this, the markets remain cautious ahead of the US Fed rate decision. Against this backdrop, the Nifty50 index dropped below the 16,900-mark intraday. But it later recovered in the last hour of the session.

⭐ Sula hopeful of strong grape harvest

The management of India’s largest wine producer said that this year’s grape harvest is shaping up to be excellent in terms of quantity and quality despite unseasonal rainfall. Meanwhile, shares of the winemaker (-6.0%) declined in a weak market.

⭐ Domestic air traffic grows 

The domestic airlines reported a growth of around 74% year-on-year in the first two months of 2023. The passenger traffic stood at 2.4 crore.  In February, Indigo’s (+0.3%) market rose 1.3% to 55.9%, while SpiceJet (+1.6%) reported a 0.2% drop in its market share to 7.1%.

⭐ Gold hits a new lifetime high 

The price of yellow metal soared to a record high. Investors are looking to invest in safe haven assets like gold amid rising global economic uncertainty. Last week, the gold prices gained over 5.5%.

In Focus

What’s happening at Credit Suisse and its impact

Shares of Credit Suisse plunged 63% in the early trade on Monday. This was despite the announcement that UBS would be buying its beleaguered rival for $3.25 billion. The deal, which was backed by the Swiss authorities, was supposed to soothe the nerves of investors. But investors continued to be anxious. ICYDK, Credit Suisse is considered as one of the financial institutions which is important for the global financial system. 

Besides the equity investors of Credit Suisse, the bondholders of the bank are also facing losses. As a part of the deal, $17 billion worth of Credit Suisse bonds were wiped off. 

So, let take a look at what’s happening at Credit Suisse and its impact: 

Helping out

Before the deal was struck, the Swiss central bank had chalked out a plan for Credit Suisse to borrow $54 billion to ease the liquidity concerns. That however wasn’t enough to stem the rout. The unravelling of the US banking crisis fuelled the slump in shares and bonds of the troubled Credit Suisse. 

A prolonged crisis 

But, trouble was brewing for Credit Suisse way before the current US banking crisis. Even in 2021, shares of Credit Suisse tumbled as it reported losses, which were linked to the implosion of Greenshill Capital and Archegos. In fact, in 2022 the bank suffered its biggest annual loss since the 2008 financial crisis. All this meant that unnerved clients withdrew $119 billion in February. 

Deepening woes

What further worsened the crisis is that last week, the bank said that it had identified “material weakness” in its internal control on financial reporting. Simply put, a lack of checks in place to stop or catch falsification of financial statements. 

Limited impact 

The collapse of the two US banks and the Credit Suisse crisis is having a rub-off effect on the bank stocks in India too. The Bank Nifty index has fallen by ~2% in March. But analysts observe that the impact of the Credit Suisse crisis on India is limited. It owns merely 0.1% of assets in the Indian banking system.    

While the Indian banking system has limited exposure to Credit Suisse, it remains to be seen how this crisis unfolds further. 

Powerful buying made simple!

Markets often see sharp price movements triggered by positive news or technical patterns. In such situations, you may want to double down on certain high-conviction trades. However, having limited capital could be an obstacle in leveraging such opportunities. With Margin Trading Facility (MTF) on Upstox, you can increase your trading capacity instantly. Click here to know more about MTF.

Benefits of MTF:

🔹Get 2X leverage on equity delivery orders

🔹Borrow up to ₹25,00,000 at a time

🔹Hold stocks bought via MTF for up to 365 days.

Phrase of the day

Going Long

When you buy a stock, futures or an option contract with the hope that its price will rise, it is called going ‘long’.  When should you go long, find out from this chapter What does going Long mean? 

Click here to join us on Telegram for trading and investment-related videos, daily market updates, details on upcoming IPOs and more.