A rebound in oil prices ahead of the meeting of the world’s top oil producers on Wednesday also soured sentiment, with the Nifty closing below 17,000, considered a key level in the near term. The index declined 207 points, or 1.21%, from Friday’s close to end at 16,887.35, below its 200-day moving average of 16,979.88 – a long-term indicator for the 50-share gauge. The BSE Sensex closed at 56,788.81, down 638.11 points or 1.11% from previous close.
“Investors booked profits on Monday on concerns of tightening liquidity conditions and rate hikes,” said Sriram Velayudhan, vice-president, alternative research,
. “This led to trimming of positions in debt-heavy names and rate sensitives such as banks.”
Europe Overcomes Initial Hiccup
European markets, however, erased all their early losses and closed higher. US markets opened 1% higher on Monday.
Citi said in a note that it’s inclined to agree with Credit Suisse chief executive Ulrich Koerner’s weekend message to its staff on the firm’s “strong capital base and liquidity position.” “We would be wary of drawing parallels with banks in 2008 or Deutsche Bank in 2016,” said Citi’s analysts. “Rather than liquidity concerns, we see the current move in spreads as an inconvenience for funding costs and for private banking NNM, where there is a risk of further outflows on the negative media headlines.”
Foreign portfolio investors (FPIs) bought shares worth a net ₹590.58 crore on Monday, snapping a 10-day selling spree. Though the inflow was modest compared to the selling seen in recent sessions, the silver lining for the market was that these investors bought amid the sell-off.