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Indices have been consolidating for a while, however, all dips are being bought eventually. Foreign institutional investors have continued to pour money into India, providing massive support to the market rally.
"The rise in the US 10-year bond yield to 1.36 per cent reflects the markets' concern about a potential rise in inflation. The ultra-easy monetary policy along with the $1.9 trillion fiscal stimulus proposed by the Biden administration may trigger inflation, which has been conspicuous by its absence for long,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
He added, “Back home, the escalation in Covid cases in Maharashtra is emerging as a cause of concern. These concerns have impacted FPI flows to the market which, though positive, appears to be slowing down. Clear trends on these concerns have to be watched.”
Factors driving markets
- US bond yields rise: Benchmark US Treasury yields hit a near one-year peak but the dollar eased against rivals.
- Covid cases: In some pockets of India, covid cases have started spiking, spooking investors who believed the crisis was all but over. If this leads to more lockdowns, there could be more negatives for the market.
- Stimulus coming: President Joe Biden's push for a $1.9 trillion Covid-19 relief bill took a step forward on Friday as a US House of Representatives committee unveiled the legislation Democrats hope to pass by late next week.
After opening in the green, benchmark indices plunged in the red. BSE flagship Sensex ended 1,145.44 points or 2.25 per cent lower at 49,744.32. The 30-scrip index lost 2,409.81 in five trading sessions. NSE benchmark Nifty followed, and settled at 14,675.70, down 306.05 points or 2.04 per cent.
In the 50-share pack Nifty, Hindalco was the biggest gainer, up 3.83 per cent. JSW Steel, ONGC, Tata Steel, HDFC Bank, Adani Ports, BPCL, Grasim Industries and Asian Paints were among other gainers.
M&M was the top loser in the pack, down 1.83 per cent. L&T, HDFC, Coal India, Eicher Motors, TCS, Maruti Suzuki, Divi’s Labs, HCL Technologies and Bajaj Finance were other losers in the pack.
Broader market indices traded with gains but outperformed their headline peers in the morning trade. Nifty Smallcap was up 0.04 per cent while Nifty Midcap added 0.37 per cent. The broadest index on NSE -- the Nifty 500 -- was up 0.07 per cent.
Aditya Birla Capital, Trent, SAIL, Dilip Buildcon, Cyient and Sonata Software were among major gainers from the space while Bajaj Electricals, PVR, IOL Chemicals, L&T Tech Services, Alembic Pharmaceuticals and Syngene were under selling pressure.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2 per cent, after slipping from a record top last week as the jump in US bond yields unsettled investors.
Japan's Nikkei recouped 1.0 per cent and South Korea 0.4 per cent, but Chinese blue chips lost 1.2 per cent.
S&P 500 and EUROSTOXX 50 futures were both hesitating around flat, while FTSE futures fell 0.6 per cent.
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26 Comments on this Story
ZEN DAHODI4 days ago
WHY the Indexes are falling? Simply because it was risen on wrong footings, wrong promises and wrong fundamentals. The stock mafias have already made their fortunes, now there is nothing left for others to gain but lose, lose and lose unless the Modi government resolved the farmers issues, stop divisions among Indians and provide fair, just and equitable democratic rule.
Mukesh Kale4 days ago
Yup, wolf cry !! last week S&P warned of resurgence of covid and in east Mah. cases started rising. But, bears took the cue and are in arena Beauty of the bear strategy is that they must sell high what they bought low. So wait for the sure rebound.
Pradeep Kumar Mittal4 days ago
Lockdown can fix powerful to stabilise somewhere but medicinal demand gets a specific area so other medicines are with old demands. Share market is powerful recommendations that connect people with money, so allow the right decisions to support the growth. Sensex reflects the concern of people's about money.