Nifty Tanks Below 16,950; What is the ‘New Trigger’?
It seems like bears are not stopping at any level to initiate their short positions. Despite a straight 800-point fall from the previous swing high of INR 17,800 to 17,000, the index is not looking to take support at absolutely any level. The major support level of 17,000 was expected to hold the index, but the hopes have been washed out today.
But what is still triggering the market? The previous fall was on account of the failure of SVB and Signature Bank in the US due to rising bond yields. Poor risk management of these banks led to bank runs in the US which created a widespread panic across the globe. However, now a new worry has triggered global panic which is the financial situation of an investment bank – Credit Suisse, one of the largest investment banks in the world.
Image Description: 5-minute chart of Credit Suisse on SIX
Image Source: Investing.com
According to Bloomberg, the top shareholder of Credit Suisse Group AG (SIX:) (Saudi National Bank) has reportedly denied giving any extra monetary support to the bank. New concerns have risen regarding the sustainability of the bank and its stock crashed over 21% in a jiffy (intraday) to 1.85 on the Swiss Exchange. Soon after the news broke, crashed sharply by 250 points, the ripple effect of which is seen on Nifty 50. As the banking crisis across the world is not suppressing, also witnessed investors fleeing away.
There has been a sharp spike seen in as market participants rushed toward safe heaven amid rising global uncertainty. Gold April 2023 futures contract on MCX shot up to the day’s high of around INR 56,700, recovering via a one-way rally from INR 57,100. An immediate reaction has also been seen in the futures which is now trading at the day’s high of 103.7. As one after other skeletons are coming out, investors’ sentiment remains pessimistic
Image Description: Daily chart of Nifty 50 (spot)
Image Source: Investing.com
Coming back to Nifty, the important support of 17,000 has also been sliced through which makes the next level of 16,750 to be the immediate support. With the worsening macro environment, the break of this support level is also highly likely now.
