Sensex, Nifty50 tumble amid a sharp rise in volatility: Bank, auto stocks drag markets down

• India’s benchmark indices Sensex and Nifty50 tumbled in the second half of trading on Monday amid a sharp surge in volatility due to concerns of a fallout from the run on Silicon Valley Bank (SVB).
  
• All but one sectoral indices were in the red, with bank, auto, realty and FMCG stocks falling the most.
  
• IT services company Tech Mahindra emerged as the top gainer in the Nifty50 pack on the appointment of Mohit Joshi as its new MD and CEO.

India’s benchmark indices Sensex and Nifty50 tumbled in the second half of trading on Monday amid a sharp surge in volatility due to concerns of a fallout from the run on Silicon Valley Bank (SVB). All but one sectoral indices were in the red, with bank, auto, realty and FMCG stocks falling the most.

Both the benchmark indices were down 1.2% midway on Monday – Sensex fell 705 points to 58,345, Nifty50 declined 200 points to 17,218. India VIX, which measures the volatility in the markets, rose sharply by over 13% on Monday.

IT services company Tech Mahindra emerged as the top gainer in the Nifty50 pack on the appointment of Mohit Joshi as its new MD and CEO.

In the week ended on Friday, March 10, bears wiped out the gains of the preceding two weeks – Sensex closed 0.52% lower, while Nifty50 fell 0.31%.

Most of the sectoral indices were in the red on Monday morning, with media, banks, auto and pharma sectors declining the most. IT was flat, while metals and financial services sectors were in the green.

Top gainers and losers on Nifty50

Source: NSE, March 13, 2023

US authorities step in to protect SVB depositors

The run on the Silicon Valley Bank left the startup ecosystem on the edge over the weekend – SVB caters to nearly half of all the venture capital-funded startups in the US. However, the US authorities rushed to step in before the bank opens on Monday, announcing that the money of all the depositors will be available when the bank opens on Monday.

That said, market sentiments were mixed on Monday morning. While Hang Seng rose 1.84%, Taiwan Weighted was flat. Shanghai Composite edged up 0.57%, while KOSPI was up 0.27%. Nikkei 225, however, fell the most, down by 1.58%.

Stocks to watch

Nazara Technologies: The gaming platform reported that two of its subsidiaries have deposits worth ₹64 crore at the collapsed Silicon Valley Bank.

Adani Group: The Gautam Adani led group said it has completed full prepayment of margin-linked share backed financing aggregating to $2.15 billion, before the committed timeline of March 31, 2023. Also, promoters have prepaid a $500 million facility availed for financing the acquisition of Ambuja Cements.

Reliance Industries: Media reports suggest that Reliance Industries’ $3 billion loan is in the final stages of completion, in a consortium consisting of three dozen banks.

ICICI Bank: RBI has granted approval of extending the deadline to divest its shareholding in ICICI Lombard General Insurance to less than 30%. The deadline has been extended till September 9, 2024.

M&M: As per reports, the automaker is likely to sell 4.6% stake in automotive component supplier Mahindra CIE Automotive at a floor price of ₹355 per share through a block deal.

Bank of Baroda: The lender plans to divest 49% stake in credit card subsidiary, BoB Financial Solutions. The bank is aiming at a 12 month timeline to bring in a partner for technology, distribution and sourcing knowledge.

Sona BLW: Private equity firm Blackstone is likely to completely exit the investment in the auto component maker through a block deal on Monday. According to reports, the floor price has been set at ₹400 per share.

Tech Mahindra: The IT company announced the appointment of Mohit Joshi as MD & CEO to take over after CP Gurnani’s retirement on December 19, 2023. Joshi has two decades of experience in enterprise technology software & consulting space.

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