Turbulent Tuesday

Nifty50: 17,043 ▼ 111 (-0.6%)
Sensex: 57,900 ▼ 337 (-0.5%)

Hi there!

Happy Pi Day to all the math lovers!
For the uninitiated, Pi (π) is one of the most popular mathematical symbols. Technically speaking, it is the ratio of the circumference of a circle to its diameter, which is approximately 3.14 (hence, Pi Day falls on March 14, i.e., 3/14).
Basically, it's an infinitely long, irrational number whose exact value cannot be known. In 2019, UNESCO designated Pi Day as the ‘International Day of Mathematics.'
And here's a trivia: Mathematician and physicist Albert Einstein was born on Pi Day in 1879! After Pi, it's time for a long sigh. Read on to know the reason.

• The markets ended lower amid rising volatility.
• Of the Nifty50 pack, 38 stocks declined.
• The US banking crisis weighed on sentiments.

Among the Nifty sectoral indices, Media (+0.1%) was the sole gainer, while PSU Bank (-1.9%) and IT (-1.6%) were the top losers.

What’s trending

⭐ US banking crisis engulfs IT stocks

The Nifty IT index (-1.6%) was one of the top losers today, falling for the fifth straight session. Heavyweights like TCS and Infosys are down 3.5% this week. So, what’s the reason behind the decline in IT stocks?

The crisis-hit US banking and financial industry is a major (30%-35%) revenue contributor to the Indian IT sector. The ongoing US banking crisis and concerns of an economic slowdown are weighing on Indian IT stocks.

⭐ Coal India ready to meet power demand 

The management of the state-owned miner (+0.2%) is optimistic about supplying 156 million tonnes (MT) of coal to the power sector in the first quarter of FY24. This represents over 25% of the company's coal supply target to the power sector for the next financial year. In anticipation of a prolonged summer, Coal India is scaling up its production and holding additional coal stock.     

⭐ CA Grameen’s AUM expands

The microfinance lender (-3.2%) crossed the ₹20,000 crore assets under management-mark. In the ongoing quarter, the NBFC added 3.7 lakh new borrowers and disbursed over ₹5,000 crore worth of loans. This is higher than the previous two quarters of FY23.

⭐ WPI inflation eases to 25-month low  

India’s wholesale price index (WPI) dropped to a 25-month low of 3.8% in February. This was aided by a decline in prices across categories, including fuel and power. The WPI rate has remained in the single digit for the fifth consecutive month.

In Focus

Gold glitters amid global gloom

The prices of the yellow metal are up 2.3% this week. Also, since the start of 2023, the gold prices have gone up more than 4%. Investors seem to be flocking towards gold amid rising global uncertainties.

So, let’s understand in detail why gold is glittering:  

Financial uncertainty

The collapse of two US banks – Silicon Valley Bank (SVB) and Signature Bank – has triggered volatility in the financial markets globally. The SVB crisis contagion has led to $383 million being wiped off the financial stocks globally, according to reports. This uncertainty has made gold appealing to investors, believe experts. ICYDK, during volatile times, gold is considered to be a safe haven for investors. 

Fed meet

Experts state that the collapse of the two banks indicates that the US Fed’s decision to raise interest rates rapidly could be adversely impacting the financial system. The US Fed’s rate-setting committee is likely to take this into consideration at the upcoming meeting this month. The street believes that the Fed may opt for smaller rate hikes as it looks to quell financial stress. This augurs well for a non-interest-yielding asset like gold. Simply put, gold becomes more attractive as compared to government bonds.   

Geopolitical conflict 

The Russia-Ukraine war continues to escalate. In fact, Russia recently suspended a major nuclear treaty with the US. Along with this, the tensions between China and the US also continue to rise. These geopolitical conflicts only add to the global economic uncertainty. This again is beneficial for gold.   

So, with multiple factors favouring gold, it remains to be seen whether it will continue shining throughout 2023.

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