Sensex, Nifty Seen Slightly Lower At Open; Adani Group Stocks May Rally

Indian shares may open lower on Monday after a sharp selloff in global bank stocks.

The downside may remain capped somewhat after U.S. finance authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank.

In a joint statement, the U.S. Treasury and Federal Reserve announced decisive actions to protect the U.S. economy by strengthening public confidence in the U.S. banking system.

The authorities also announced that Signature Bank, which had a lot of crypto exposure, would be closed due to systemic risks.

An emergency closed-door meeting will be held by the Federal Reserve Board of Governors later today to review and determine the advance and discount rates to be charged by the Federal Reserve banks.

Closer home, Rajeev Chandrasekhar, state minister for technology said he would meet with Indian start-ups this week to understand impact on them and how the government can help during the crisis.

Ahead of CPI and WPI inflation readings due this week, RBI Monetary Policy Committee (MPC) member Ashima Goyal said on Sunday that inflation in the country will come down over the year and domestic rates must not rise too much at present because of slowing external demand.

Adani Group stocks could be in focus today after the conglomerate fully prepaid “margin-linked” share-backed loans worth $2.2 billion (Rs 20,494 crore) way ahead of their maturity date.

Media reports suggest that the Adani Group is likely to make an announcement early this week on selling a stake in its cement business to GQG Partners.

Asian markets traded mixed this morning, with Chinese and Hong Kong stocks trading in positive territory, tracking gains in U.S. stock futures.

The dollar slid in international markets, with the spotlight firmly on Tuesday’s inflation data. Gold edged higher while oil prices were slightly lower after climbing more than 1 percent on Friday.

U.S. stocks tumbled on Friday and Treasury yields extended their slide amid worries over financial contagion from the implosions of Silicon Valley Bank (SVB) and Silvergate Capital.

February’s employment report sent mixed signals, with job growth beating expectations while slower wage growth and a rise in the unemployment rate fueled speculation that the Fed might moderate its rate hikes.

The Dow fell 1.1 percent, the S&P 500 lost 1.5 percent and the tech-heavy Nasdaq Composite slumped 1.8 percent.

European markets also closed sharply lower on Friday, led by a sell-off in the banking sector.

The pan European STOXX 600 declined 1.4 percent. The German DAX and France’s CAC 40 index both gave up around 1.3 percent while the U.K.’s FTS 100 shed 1.7 percent.