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Quote On Morning Market 13 March 2023 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The SVB issue is unlikely to rattle markets for long. The quick joint statement by the US Treasury, the Fed and the Federal Deposit Insurance Corporation that all the depositors money will be safe is enough to calm the markets. The ‘Lehman’ comparison is totally inappropriate. However, investors have to be careful since there can be a sentimental impact on banking stocks. Since this crisis has near zero impact on Indian banking, investors with a higher risk appetite can use the weakness in the market to buy high quality bank stocks. A possible positive impact of the SVB crisis is that it may nudge the Fed to go less hawkish since the aggressive rate hike by the Fed lies at the root of the SVB crisis. If the US CPI inflation data tomorrow indicates a declining trend in inflation, the Fed is unlikely to raise rates by 50 bp in the March 22 meeting. That will be a positive from the market perspective.

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