Domestic stock markets on Friday plummeted 3.80 per cent in line with the weak global trend triggered by a sharp rise in bond yields and the growing tension between the US and Iran. Led by banking and finance stocks, the benchmark Sensex plunged 1,939 points to 49,099.99 and the NSE Nifty Index fell 568 points at 14,529.15 as investors sold off stocks across the board.
What led to the sell-off in Indian market?
On Thursday, the US 10-year yield climbed to 1.614 per cent, the highest in a year. Concerns over inflation in the US is the reason behind rising of bond yields. The bond market is expecting the likely rise in inflation to push the US Federal Reserve to either lower monthly bond-buying or hike interest rates, an adverse factor for markets like India, which have been a major recipient of foreign inflows of late. This is despite the US Feds reassurance of keeping the low cost of money intact. The rising crude oil prices are also raising concern among the investors. The increasing geopolitical tension between the US and Syria aggravated the selling. GDP data for the third quarter which is to be released today also added volatility in the Indian market, said Vinod Nair, Head of Research at Geojit Financial Services.
The benchmark 10-year bond in India also rose to 6.22 per cent, up four basis points.
https://indianexpress.com/article/explained/explained-why-has-the-sensex-plunged-1939-points-7206180/
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Domestic stock markets on Friday plummeted 3.80 per cent in line with the weak global trend triggered by a sharp rise in bond yields and the growing tension between the US and Iran. Led by banking and finance stocks, the benchmark Sensex plunged 1,939 points to 49,099.99 and the NSE Nifty Index fell 568 points at 14,529.15 as investors sold off stocks across the board. What led to the sell-off in Indian market? On Thursday, the US 10-year yield climbed to 1.614 per cent, the highest in a year. Concerns over inflation in the US is the reason behind rising of bond yields. The bond market is expecting the likely rise in inflation to push the US Federal Reserve to either lower monthly bond-buying or hike interest rates, an adverse factor for markets like India, which have been a major recipient of foreign inflows of late. This is despite the US Feds reassurance of keeping the low cost of money intact. The rising crude oil prices are also raising concern among the investors. The increasing geopolitical tension between the US and Syria aggravated the selling. GDP data for the third quarter which is to be released today also added volatility in the Indian market, said Vinod Nair, Head of Research at Geojit Financial Services. The benchmark 10-year bond in India also rose to 6.22 per cent, up four basis points. https://indianexpress.com/article/explained/explained-why-has-the-sensex-plunged-1939-points-7206180/