Why stock market today is volatile post-SVB First Citizens Bank deal — explained

Symphony buyback

Today’s stock market has been trading erratically despite great hopes for a relief rally on Dalal Street following the Silicon Valley Bank (SVB) First Citizens BancShares merger. Index of 50 stocks While the BSE Sensex is trading range-bound in a 525 point range, the Nifty is trading in a tight 135 point range. The Nifty Bank index is also trading sideways, with an intraday range of about 250 points.

Stock market specialists claim that the market was anticipating a clear road map from the US government and US Federal Reserve on the US bank issue. But, the Joe Biden administration and the US central bank are approaching this problem piecemeal, focusing on one bank at a time. They said that the SVB First Citizens BancShares deal caused the market’s sentiment to turn negative because it only addressed one bank and did not allay concerns about the US banking system’s impending collapse.

Deal with SVB First Citizens Bank
Ravi Singhal, CEO of GCL Broking, commented on why the stock market is trading so erratically today “Concerns about the US financial sector as a whole have been raised by the US bank crisis. Market participants anticipated a clear road map from the US Fed and the Joe Biden administration following the FOMC meeting, but instead, the US central bank and the US government have been engaging in action-reaction gimmicks. The atmosphere on Dalal Street and other Asian markets has worsened as a result. Today’s market behaviour is primarily the result of the US Federal Reserve and US administration’s above-the-belt actions.”

Sumeet Bagadia, Executive Director at Choice Broking, advised investors in the stock market to be aware of their levels and keep themselves protected from the current volatility in the market “The market is currently range-bound. Today, the Sensex is trading between 57,000 and 58,800, while the Nifty 50 index is between 16,800 and 17,200. Now, the Nifty Bank is between 38,900 to 40,300. One should continue to keep their attention on the variety of important benchmark indexes rather than the volatility on Dalal Street.”

stock picks for today
Today, GCL Broking’s Ravi Singhal revealed a day trading strategy for the stock market “With the current state of the stock market, one can consider pharmaceutical and FMCG stocks as safe bets. Aurobindo Pharma shares are appealing in the pharmaceutical industry, while Marico and Dabur may provide investors outstanding returns in the near future in the FMCG sector. Another option is to look at equities of fertiliser companies like GNFC and Chambal Fertilizers.”

Disclaimer: Currency Veda does not endorse the opinions or suggestions expressed above by specific analysts or brokerage firms. Before making any financial decisions, we suggest investors to consult with licenced professionals.