oppn parties Stock Markets Crash Heavily

News Snippets

  • Supreme Court allows a raped minor to end her 30-week pregnancy
  • Mamata Banerjee calls Calcutta HC order in teacher appointment "illegal" and "one-sided", state government to file appeal in Supreme Court
  • Calcutta HC scraps TM|C government's 2016 process of appointing school teachers, 25757 teachers set to lose their jobs and asked to return their salaries
  • Congress tells EC to disqualify PM Modi for his speech saying Muslims will be the biggest beneficiaries of Congress' redistribution of wealth, alleges Modi trying to inflame passions and create enmity between communities
  • NCLT admits Indiabulls' plea against insolvency proceedins against Subhash Chnadra, the founder and chairman emeritus of Zee Enterprises
  • Vodafone FPO oversubscribed by 7 times, becomes the biggest such fund-raise
  • RBI tells payment companies to track dubious transactions that may be used to influence voters
  • RIL profit stood at Rs 21243cr in Q4 FY23 even as revenue rose by 11% to Rs 2.4 lakh cr
  • Stocks remain positive on Monday: Sensex gains 560 points to 73648 and Nifty 189 points to 22336
  • IPL: Rajasthan Royals on fire, beat Mumbai Indians by 9 wickets as Sandeep Sharma takes 5 for 18 and Yashasvi Jaiswal roares back to form with a brilliant century
  • IPL: Gujarat Titans beat Punjab Kings by 7 wickets
  • IPL: KKR beat RCB by 1 run in a last-ball thriller in the heat chamber of Kolkata's Eden Garden with temperatures soaring above 40 degrees
  • Candidates Chess: D Gukesh emerges winner. Draws last match with Hikaru Nakamura to end at 9 points. Former tournament leader Ian Nepomniachtchi also draws with Fabioano Caruana to leave Gukesh as the sole leader and winner to challenge Ding Liren
  • Supreme Court says all cases of mob violence and lynchings should not be given a communal angle
  • Supreme Court tells petitioners who want elections to be held with ballot papers as they fear EVM tampering to back their claims of tampering with data
Calcutta HC scraps 2016 teacher appointment process, 25757 teachers to lose their jobs, ordered to repay salaries withdrawn in 4 weeks
oppn parties
Stock Markets Crash Heavily

By Sunil Garodia
First publised on 2024-01-17 10:43:41

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.

There was bloodbath on Dalal Street on Wednesday as markets crashed big time after a big rally a couple of days back. Sensex lost 1628 points or 2.23% to close at 71500 and Nifty lost 460 points or 2.09% to close at 21571.  The immediate trigger for the huge fall was the hawkish stance of US Fed regarding rate cuts which led to spike in yield in US 10-year treasury bonds and a rise in the dollar index. Locally, the market was concerned about the pressure on net interest margin of HDFC Bank although the December quarter results of the bank were as per expectation. The meltdown in HDFC Bank shares, which lost 8.44% today, was a big contributory factor in the crash as it pulled down the price of the shares of other banks also. The Nifty Bank was down 4.3% on persistent sell-off. In the last two trading sessions, the indices have wiped out all the gains made last week and till Monday this week.

The Federal Reserve Governor Christopher Waller said that "I see no reason to move as quickly or cut as rapidly" as in previous rate-cutting cycles, as long as labor markets and economic activity is solid. He added that "when the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully." The yield on US 10-year treasury bonds spiked to 4% after his comments and stock markets the world over tumbled on selling pressure. Investors in India read this as a signal that the RBI's monetary policy committee will also not cut rates given that inflation remains high in India too. This led to a sell-off, both by foreign and domestic investors.

On the other hand, while HDFC Bank posted good numbers for the December quarter and it met the expectations of the market, analysts found that there was huge pressure on net interest margins and costs were rising too. They said that it meant that going ahead banks would be hard pressed to maintain the level of profitability. HDFC Bank reported an increase of just 4% in net interest income for the December quarter. Analysts said that this meant that operating profit growth drivers were not sustainable (meaning operating profit would go down going ahead). This immediately led to a sell-off in HDFC Bank in particular and all other banks in general. This dragged Nifty Bank down by 4.3%.