SGX Nifty to banking crisis - key global market triggers for Indian equities

Global markets update: The central banks and governments over the weekend hatched a deal to rescue Credit Suisse and First Republic Bank, but the contagion fears of a larger baking crisis remain. Asian stocks opened mixed on Monday. All eyes are now on US Federal Reserve, which will announce its monetary policy decision on March 22.

Here are the key global market triggers that could drive Indian market today:

Asia Market

Asian stocks steadied and U.S futures rose on Monday in relief at a weekend rescue deal for Credit Suisse and a concerted effort from central banks to shore up the mood, though trade was tense and volatile as contagion fears stalked financial shares, reported Reuters.

UBS-Credit Suisse rescue deal

In an effort to avoid further market-shaking turmoil in the global banking system, UBS is buying troubled rival Credit Suisse for almost $3.25 billion.

The Swiss bank is paying 3 billion francs ($3.3 billion) for its rival in an all-share deal that includes extensive government guarantees and liquidity provisions. The price per share marked a 99% decline from Credit Suisse’s peak in 2007.

SGX Nifty

SGX Nifty traded about 80 points lower at open from Nifty Futures Friday close. This indicates a start in the red for the Indian market.

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US FOMC Meet

The next Federal Open Market Committee (FOMC) is scheduled to meeton March 21 and 22 with the announcement of policy rate decision at the end. The market is expecting a 25 bps rate hike this time after crisis at Silicon Valley Bank Signature Bank and Credit Suisse, lower than 50 bps hike expected earlier.

The investors will also watch out for the commentary from the Fed on the banking crisis.   

Gold, Crude oil rate today

Crude oil edged higher after collapsing by 12% last week, while copper futures also gained. Gold — which had benefited from the turmoil with a rally toward $2,000 an ounce — dropped as much as 0.7% as the week’s trading kicked off, reported Reuters.

US Market

First Republic Bank was downgraded again Sunday by S&P Global Inc., days after the ratings firm cut the lender to junk. S&P said it lowered First Republic’s long-term issuer credit rating to B from BB, reported Bloomberg.

On Friday, the US market closed lower as Credit Suisse crisis unfolded. S&P500 was down 1.1%, Nasdaq 0.7%.