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Indian benchmark indices opened sharply lower as investors digested the impact of the US 10-year Treasury yield crossing 5.10 per cent. Both indices opened with a gap down, with the Sensex falling over 500 points and the Nifty slipping below the 23,300 mark, while the Nifty Private Bank and Nifty Financial Services indices declined around 2 per cent each.
Sensex opened lower at 74,272.40 against the previous close of 74,828.25 and was trading at around 74,189.09, down 639.16 points or 0.85 per cent at around 9:22 AM. Likewise, Nifty opened at 23,221.80 against the previous close of 23,446.80 and was trading at around 23,222.90, down 223.90 points or 0.95 per cent at the same time. All broad market indices traded in the red. Similarly, all the indices traded in negative territory, with financial services, metals, and private bank emerging as the major losers. US bond yields surged on Wednesday, with several hitting their highest levels since 2007, as stronger-than-expected business activity, which expanded at its fastest pace in more than five years, fuelled expectations of an interest rate hike next month. On NSE, TCS, BEL emerged as top gainers. HDFC Life, Bajaj Finance, Axis Bank, Bajaj Finserv, Kotak Bank, Max Health, Hindalco, Grasim, SBI Life, LT, Maruti, among others, were the major losers. Likewise, on BSE, Tech Mahindra, Sun Pharma, HCL Tech, ICICI Bank, TCS were the top gainers. Bajaj Finance, Axis Bank, Kotak Bank, HDFC Bank, Power Grid, M&M, Trent, LT, Hindustan Unilever, Eternal, among others, traded in the red. In commodities, gold remained subdued in early Asian trade as expectations of further US Federal Reserve rate hikes weighed on the non-yielding asset. At the time of reporting, the yellow metal was trading at around USD 4,283.35. At the same time, Brent crude was trading at around USD 102.20 per barrel, while crude oil was trading at around USD 91.42 per barrel. Market analyst Vipin Dixena noted, Nifty is facing selling pressure after the strong recovery seen yesterday. The immediate trigger is the sharp rise in global bond yields the US 10-year yield moved above 5.1% along with Brent crude moving back above USD 103. Meanwhile, he noted, What is interesting, however, is that FII flows had improved yesterday. Technically, I am watching 23,30023,270 as the immediate support zone and 23,50023,600 as the major resistance zone. Nifty is still below its key moving averages, although momentum indicators have shown some improvement. So I would want to see price reclaim 23,500 before calling this recovery structurally stronger, Dixena said. Devarsh Vakil, HSL Prime Research, noted, US equities fell sharply, snapping record runs, as the 10-year Treasury yield broke above 5%. The Nasdaq dropped 1.1% to 26,936, giving back its two prior record closes. The S&P 500 and Dow lost 0.8% and 0.7%. The Russell 2000 fell roughly 1%. As per Vakil, A sustained move above 23,600 would strengthen the bullish outlook, for Nifty, whereas a break below 23,100 could put renewed pressure on the index. Meanwhile, the National Stock Exchange of India (NSE) is set to make its much-awaited stock market debut today. (ANI)
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