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Online brokerage firm Zerodha's co-founder Nithin Kamath on Monday asserted that this dark cloud (global meltdown) also had a silver lining for India in the form of “leverage" in the capital market. Leverage in times like these usually accentuates the fall, Kamath wrote on Twitter.

“The silver lining for India in the current global meltdown is that we may continue to do better than other markets on a relative basis because of the low levels of leverage in our capital markets," Kamath tweeted.

In a series of tweets, he explained how leverage is like WMD (Weapon of mass destruction), resulting in excesses both on the way up and down.

“When markets fall, long leveraged positions are required to bring additional margins, failing which positions are forced to exit resulting in the markets falling even more," the Zerodha co-founder said.

He added, “thanks to regulatory changes, leverage offered by brokers is now restricted only to margin funding & at very low levels. Higher margin requirements across the board have also reduced the risk. Even loans against securities offered by NBFC/Banks are at historically low levels."

“Even in F&O, most business has moved to options, which while being risky for a trader doesn't bring in as much risk of forced liquidations to the overall markets as futures," he further said.

“Btw, impossible to figure out the leverage FIIs have outside India that may lead to liquidations here," he wrote on Twitter.

Kamath has earlier voiced his concern over the sharp fall in the stock prices of Big Tech firms such as Apple, Microsoft, Google parent Alphabet, and other tech- heavy firms across the globe, calling the market movement "crazy" and almost like dot-com boom.

On Monday, Dalal Street sank in a sea of red, mirroring a meltdown in global equities, as investors braced for steeper rate hikes by the Federal Reserve after US consumer inflation soared to a four-decade high.

Unabated foreign fund outflows and the rupee breaching the 78-mark against the US dollar for the first time ever further soured risk appetite.

Extending its losses to the second straight session, the 30-share BSE Sensex plummeted 1,456.74 points or 2.68 per cent to finish at 52,846.70.

The broader NSE Nifty tanked 427.40 points or 2.64 per cent to 15,774.40.

Investor wealth tumbled by over 6.64 lakh crore in Monday's session, with the market capitalisation of all BSE-listed firms dropping to 2,45,19,673.44 crore.

Bajaj Finserv was the top loser in the Sensex pack, skidding 7.02 per cent, followed by Bajaj Finance, IndusInd Bank, Tech Mahindra, ICICI Bank, TCS, NTPC, Infosys and SBI.

Nestle India was the sole gainer among Sensex constituents, inching up 0.46 per cent.

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