Sensex drops 747 pts, European mkt opens lower

The domestic equity indices traded with deep cuts in afternoon trade. The Nifty slipped below the 16,900 level. All the sectoral indices on the NSE were in the red with metal, PSU bank and realty stocks falling the most.

At 13:30 IST, the barometer index, the S&P BSE Sensex, was down 746.9 points or 1.29% to 57,243. The Nifty 50 index lost 217.30 points or 1.27% to 16,882.75.

In the broader market, the S&P BSE Mid-Cap index slipped 1.52% while the S&P BSE Small-Cap index fell 1.31%.

Sellers outnumbered buyers. On the BSE, 886 shares rose and 2,639 shares fell. A total of 124 shares were unchanged.

Investors reacted negatively to news of a Credit Suisse bailout by its bigger rival UBS. On Sunday, Switzerland's biggest bank, UBS, agreed to buy Credit Suisse in an emergency rescue deal aimed at stemming financial market panic unleashed by the failure of two American banks earlier this month, media reports stated.

UBS is paying 3 billion Swiss francs ($3.25 billion) for Credit Suisse in an all-share deal, about 60% less than the amount the bank was worth when markets closed on Friday, the reports added. Credit Suisse investors will reportedly get one UBS share for every 22.48 Credit Suisse shares held.

Meanwhile, caution prevailed ahead of the US Federal Reserve's meeting outcome due later this week. Investor will keep on eye on the actions of the American Central Bank to see how it will proceed in its fight against inflation in light of the shakeup in the banking sector.

Gainers & Losers:

Bharat Petroleum Corporation (BPCL) (up 1.85%), Hindustan Unilever (up 0.67%) and Divi's Laboratories (up 0.63%) were the top Nifty losers.

Bajaj Finserv (down 4.78%), Adani Enterprises (down4.75%), Hindalco Industries (down 3.54%), Bajaj Finance (down 3.49%) and Tata Motors (down 3.04%) were the top Nifty gainers.

Bharat Petroleum Corporation (BPCL) rose 1.85%. The company said that it allotted 93,561 non-convertible debentures (NCD's) aggregating to Rs 935.61 crore on a private placement basis.

Separately, BPCL announced the appointed Krishnakumar Gopalan as the chairman & managing director (C&MD) of the company with effect from 17 March 2023. The appointment is until Gopalan's superannuation or until further orders, the Ministry of Petroleum and Natural Gas said. Gopalan replaces Arun Kumar Singh, who retired as chairman in October 2022.

Stocks in Spotlight:

HDFC Bank fell 1.50% and HDFC declined 0.89%. HDFC Bank announced that the National Company Law Tribunal (NCLT) on Friday approved the proposed merger scheme of Housing Development Finance Corporation (HDFC) with the bank. HDFC had announced its merger with HDFC Bank on 4 April 2022. According to the merger scheme, HDFC Bank will become 100% owned by public shareholders and existing shareholders of HDFC will own 41% of HDFC Bank.

Tata Steel slipped 2.43%. The company announced that it has acquired 1,55,34,738 equity shares of its wholly owned subsidiary, Tata Steel Advanced Materials (TSAML) for an amount aggregating to approximately Rs 19.90 crore.

Glenmark Pharmaceuticals added 0.26%. The pharma company said that it has received final approval by the United States Food & Drug Administration (US FDA) for Prochlorperazine Maleate tablets, the generic version of Compazine tablets of GlaxoSmithKline. Prochlorperazine is used in the treatment of nausea, vomiting, and migraine caused by various conditions.

Global Markets:

Shares in Europe and Asia tumbled on Monday after UBS agreed to buy its banking rival Credit Suisse in a $3.2 billion takeover over the weekend.

The People's Bank of China left the loan prime rates for 1-year and 5-year unchanged, after cutting the reserve requirement ratio for almost all banks by 0.25 percentage points last week. The 1-year LPR stayed at 3.65% while the 5-year LPR remained at 4.3%, both unchanged since August last year.

UBS Group AG, Switzerland's largest banking group, has agreed to acquire the crisis-hit Credit Suisse Group AG in a $3.23-billion deal. Swiss regulators played a key role in facilitating the deal in an effort to quell a contagion threatening the banking sector. Under the deal, Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares. The combined bank will have $5 trillion of invested assets, according to UBS.

Wall Street closed lower on Friday as investors pulled back from positions in bank shares amid lingering concerns over the state of the U.S. banking sector.

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