Sensex Drop Affects AU Small Finance Bank

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Sensex and Nifty were observed to be constantly dropping in the previous week, as the global equities displayed tension. The panic is affecting banks, including AU Small Finance Bank. At the same time, they await the results of the US Federal Reserve meeting.

An article published by the Indian Express noted that the significant factors affecting the Indian market and other markets globally are geopolitical tensions and global inflation. The Ukraine War has been putting extreme pressure on the markets. 

Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, said, “Statements from the Russian and US Presidents on February 21 indicated no respite in geopolitical tensions or an end to the war and brought further uncertainty to equity markets.”

Anushka Sharma, a news writer for the Economic Times, also noted that the war has dramatically affected the currencies of many nations and highlighted that “the Indian rupee has weakened by almost 800 paise, or 9.8 per cent, against the USD.” Sharma added that the rupee has corrected by around ten per cent against the USD. However, the effect is still felt one year after the war began.

Global inflation influenced by Wall Street was another major factor in the decline of the market. Ajit Mishra, vice president for Technical Research at Religare Broking Ltd., noted, “The pressure was widespread wherein continuous decline in the banking heavyweights combined with a further dip in the IT and energy majors were largely weighing on the sentiment.”

Many experts in the field believe that the Fed will continue to raise interest rates, and this will influence the decision of the Reserve Bank of India (RBI) to increase the repo rates to manage the price levels.

These factors affected the price of shares for the AU Small Finance Bank. Earlier this week, the bank’s shares traded at Rs 602.85, 1.73 per cent lower by mid-day. However, investors expect growth shortly, so they are willing to pay higher share prices.

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