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Wild swings to continue in commodities as fear dominates market sentiments

Mar 18, 2023 / 04:37 PM IST

Market sentiments remain fragile as the fears of a financial crisis are still far from being contained yet and hence volatile moves cannot be ruled out.

Ravindra V Rao, VP-Head Commodity Research at Kotak Securities

Panic gripped investors this week as the banking crisis spread from the US to Europe, sparking fears of a contagion in the global financial markets.

The week started with plans by the US regulators to stem further systemic risk with a joint statement from Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Federal Deposit Insurance Corporation Chairman Martin J Gruenberg that the FDIC will make SVB and Signature’s customers whole. However, this failed to calm investors' nerves.

Moreover, Credit Suisse and First Republic Bank added to the list of troubled banks, yet another reason to keep markets edgy. Credit Suisse shares hit an all-time low after its largest investor, Saudi National Bank, Credit Suisse's largest investor, refused to provide any more funding after the Swiss lender found “certain material weaknesses in internal control over financial reporting” for the years 2021 and 2022. First Republic Bank, the San Francisco-based lender, too saw a similar fate, after S&P Global Ratings and Fitch Ratings cut their ratings to junk.