The 30-share BSE Sensex opens in the red at 59,265.99, down 401.61 points, down 0.67 per cent. On the other hand, blue-chip Nifty50 was trading at 17,748.60, down 106.50 points, or 0.60 per cent. On NSE, NTPC was the top gainer with the gain of 5.43 per cent, followed by Maruti with 5.22 per cent, Powergrid with 5.11 per cent and IOC with 4.73 per cent, and at last Coal India with the gain of 4.27 per cent. However, Tech Mahindra, HCL Tech, Wipro, Divislab, Bajaj Finserv were among the laggards, in early trade. Sectorally, Nifty Pharma was the top gainer, followed by Nifty Metal, Nifty FMCG, Nifty IT. However other indices like Nifty Bank, Nifty Media, Nifty Auto all were trading in the red.
“The surge in the benchmark US 10-year yield to 1.546 percent spooked equity markets in the US with cuts of above 2 percent in S&P 500 and Nasdaq. The rise in US bond yields triggering correction in equity markets has been a known threat for some time now. But what triggered this sudden spike in bond yield was the Fed chief Powell’s statement that inflation may persist for a much longer time. The rise in the dollar index to 93.7 levels indicate profit booking in stocks and safe-haven buying into the dollar. It is too early to conclude that this is a trend reversal for markets. Perhaps the ‘ buy on dips’ strategy may again work out. But at the present elevated valuations, the risk is high. Investors may watch for consolidation in markets,” Dr. V K Vijayakumar, chief investment strategist at Geojit Financial Services.
On BSE, Future Retail was the top gainer followed by NBCC, Future Consumer, Future Lifestyle Fashion, SAIL. On the flip side, EIHotel, Oberoi Realty, Metropolis were the top losers. BSE Midcap down by 0.20 per cent and BSE SmallCap down by 0.33 per cent.
“Domestic equites look to be weak as of now. Benchmark indices outperformed global markets in recent period as sustained recovery in key economic indicators and faster vaccination ramp-up with least possibility of third wave of COVID-19 hitting in a bigger way bolstered investors’ confidence. Notably, tax collection data for 1HFY21 looks quite impressive, which virtually crossed pre-pandemic FY20 numbers with a wide margin. This along with government’s borrowing target of Rs5.03trillion (mostly on expected line) certainly bodes well for economy and bond markets. However, investors remain on tenterhook with regards to progress on Evergrande. Further, sharp rise in USA bond yield and dollar index (rose ~15 per cent in a month) could be a near term risk for emerging markets,” Binod Modi, head strategies at Reliance Securities said.
The Indian market opened in red, taking negative cues from the global market. The US stock market also opened in the red and the US stocks saw their worst day since May. The Nasdaq 100 tumbled the most since March. Similarly, Asian stock markets also opened lower on Wednesday, equities fell in Japan, Australia and South Korea as mounting concerns over the debt-ceiling impasse in Washington added to investor angst. The Hang Seng Index sank 0.91 percent, or 223.68 points, to 24,276.71. The Shanghai Composite Index lost 0.80 percent, or 28.70 points, to 3,573.52, while the Shenzhen Composite Index on China’s second exchange also retreated 0.80 percent, or 19.34 points, to 2,382.86. Tokyo’s key Nikkei index opened down two percent on Wednesday, extending global market jitters, as traders worried about rising oil prices and fears of a US debt default.
On Tuesday, the 30-share BSE barometer pared some losses to end 410.28 points or 0.68 per cent lower at 59,667.60. The broader Nifty of the National Stock Exchange declined by 106.50 points or 0.60 per cent to close at 17,748.60, dragged down by Bharti Airtel and Tech Mahindra.
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