Will the Silicon Valley bank crisis affect the Indian stock market next week?

According to stock market watchers, the fall in banking stocks dragged other major benchmark indices smelly and Sensex in Friday’s session. But, the news of Silicon Valley Bank bankruptcy will not last long as it is completely emotional news for Dalal Street. From a fundamental point of view, Indian banks are completely insulated from Silicon Valley Bank and the recent quarterly results show improvement in margins of Indian banks. He advised traders to buy quality banking stocks in this downtrend as these banking stocks would rally strongly during trend reversal. However, experts say that banks’ margins have improved due to the higher interest rate regime. But, the higher interest rate regime works in favor of the banks for the short term. If the interest rate regime remains for a long time, it affects the business of the banks due to higher lending rates and the US based banks are facing the same issue these days.

banking stocks in focus

Speaking on the Silicon Valley bank crisis and its impact indian stock marketAvinash Gorakshkar, Head of Research, Profitmart Securities, said, “From a fundamental point of view, Indian banks have nothing to do with the SVB crisis and neither do US banks have any penetration in the Indian corporate sector. I was only emotional. Dalal Street was already negative.”

However, Avinash Gorakshkar said that the higher interest rate regime has worked in favor of Indian banks which has led to strong third quarter numbers for Indian banks. But, this will not work for long and hence positional investors are suggested to keep an eye on it. RBI monetary policy Any further rate hike as a result of the Committee (MPC) in the near term could impact the business volumes of Indian banks. He also said that some sections of corporates are comparing this SVB crisis with the subprime loan crisis that started with the collapse of Lehman Brothers.

Anuj Gupta, Vice President – Research et IIFL Securities said, “Indian banks are in good financial health as demand is high on both retail and corporate front. Falling US dollar rates are also going to bring back large corporates in India, who shifted to overseas borrowings due to depreciation in the Indian national They went. Rupee (INR) against the US Dollar.

Stocks to Buy After a Stock Market Crash

Anuj Gupta said this is an opportune time for bottom fishing investors as quality banking stocks are expected to see a strong rally following a turn in stock market sentiments. IIFL Securities expert advises positional investors to buy quality banking stocks such as ICICI Bank, Axis Bank, State Bank of India (SBI), Bank of Baroda and IDFC First Bank.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.