Morning Market Quote : Fears of banking contagion hitting equity markets have aggravated FII selling Says Dr. V K Vijayakumar, Geojit Financial Services
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Quote On Morning Market 21 March 2023 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
Two data points indicate the current market mood. The stock price of the US bank First Republic crashed by 40% yesterday and gold zoomed by 2% . Fears of contagion in the global banking system is causing the nervous selling in vulnerable banking stocks and strength in gold is indicative of the flight to safety. Fears of banking contagion hitting equity markets have aggravated FII selling, which has reached a cumulative Rs 11757 crores in the last 11 days. FII’s net short position is at record highs indicating negative expectations. Even though the current texture of the market is sell on rallies, the huge short position may trigger a short-squeeze if the Fed decides to pause in the meeting tomorrow. Tomorrow’s Fed decision and commentary will be crucial.
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