Markets tank again on weak global cues
On the sectoral front, the Nifty IT index fell 2.1%, followed by Nifty Fin Serve (-1%) and Nifty FMCG (-0.94%)
MUMBAI : Indian stock markets slid 1% on Wednesday on weak global cues as rising US treasury yield and higher crude prices kept investors under pressure.
Benchmark indices, Sensex and the Nifty, were down 1.08% and 0.96% to 60,098.82 points and 17,938.4 points, respectively, at the close of the day’s trade. On the sectoral front, the Nifty IT index fell 2.1%, followed by Nifty Fin Serve (-1%) and Nifty FMCG (-0.94%).
Gainers included the Nifty PSU bank index, which rose 2.2%, followed by Nifty Media (1%), Metal (0.8%) and Auto (0.7%). On Tuesday, the Sensex and Nifty declined 0.9% and 1.07%, respectively, after a drone attack on three fuel tankers of the Abu Dhabi National Oil Co. (Adnoc) sent oil prices to a seven-year high.
On Wednesday, the Western Texas Intermediate (WTI) crude futures contracts traded at $86.39, up $1.12 from its previous close of $85.43.
“Globally, risk sentiments took a blow as rising inflation resulted in elevated bond yield. Along with that the ongoing geopolitical tensions and surge in oil prices weighed on investor confidence. Also, consistent FII selling forced the domestic market to trade in favour of bears for the second strai-ght day. The UK’s inflation rate rose to 5.4% in December from 5.1% in November owing to rising demand, surging energy costs and supply constraints," Vinod Nair, head of research, Geojit Financial Services, said.
Rising US treasury yields also emerged as a major concern for markets, and investors will keep a close eye on the US Fed’s moves on interest rate hikes and liquidity tapering. “The yield on the benchmark 10-year Treasury note rose 9 basis points to 1.86%, the highest since the start of the pandemic. As the Federal Reserve moves to counteract the surge in inflation, investors have started selling bonds, which pushes yields higher," said Mitul Shah, head of research, Reliance Securities. “In the past we observed that volatility in market persists till Fed anno-unces the first rate hike, post that it settles down and flow in equities resumes," he added
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