Latest News
-
Mahindra Finance Detects Rs 150 Crore Fraud, Postpones FY24 Financial Results -
Rs 2.20/Share Dividend Declared: 84-Yrs Old Small Cap Tata Co Reports 7.7% Rise In Net -
Sebi Enhances Liquidity with Extended Cross-Margin Benefits for Futures -
Mahindra Finance Detects Rs 150 Crore Fraud, Postpones Financial Results -
Telecom Service Sector's AGR Climbs 1.8% to Rs 67,835 Cr in December 2023: TRAI Data -
Google Fires Over 50 Employees for Protesting Israel Cloud Computing Deal -
Power Grid Corporation to Infuse Funds into NHPTL, Securing 50% Ownership -
1:1 Bonus, Rs 167.6 Sh/Dividend Paid: Tata's IT Co Announces Highest Ever Rs 70/Sh Dividend; Q4 Results Here -
3 Free Shares, Rs 4/Share Dividend: Pharma Stock Rallies On Bonus Share, Dividend Proposal -
Google CEO Sundar Pichai Terminates Over 20 Employees Amidst Internal Protests Over Israel; Reports
Sensex Plunges By Over 850 Pts: Here Are Likely Reasons For The Fall
On August 22, stocks were subject to intense selling once more, causing indices to close down for the second day in a row. It was also the market's worst decline in the previous two months. Domestic equities markets have fallen precipitously over the past two days as Dalal Street once again became gripped by worries about dramatic rate hikes.
Investors continued to be concerned about the likelihood of rapid rate hikes by the Fed, which contributed to widespread selling on the back of sluggish global markets and a rising dollar index. The BSE Sensex and NSE Nifty indices have lost 1,524 points and 465 points, respectively, since last Friday.
The majority of sectoral indicators were in the red. The Nifty Metal index fell 2.98 per cent. The biggest loser was Tata Steel, followed by Asian Paints and Adani Ports. The leading gainers were Tata Consumer Products, ITC, Coal India, and Nestle.
Dollar index is on up trend again
In recent times, the US currency has also strengthened as expectations for additional rate increases have grown. As investors were uneasy, the dollar index rose to a new five-week high of 108.26 on Monday. Rupee also declined to levels of 79.86 per Dollar.
US bond yield is 10 yr high
For the first time in a month, the yield on the US 10-year bond touched the 3% level. On July 21st, the US yield last surpassed 3%. When yields trend higher bonds being backed by the sovereign government become more attractive and hence there is an exodus of funds from emerging market equities to bonds.
Muted Asian Indications
Investor sentiment was also negatively impacted by muted Asian indications. While investors wait for the annual Fed meeting in Jackson Hole, Wyoming, for rate guidance, Asian stocks were mixed after China cut an interest rate that affects mortgage lending, according to AP. Last week, minutes from the US central bank's July board meeting confirmed plans for more increases despite signs of weaker economic activity.
Market Commentary
Mr Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd. on market has said, "The weakness in the Indian market continued for the second consecutive day amidst concern over Fed's commitment to hike policy rates aggressively. Nifty opened down and continued to drift lower throughout the session to finally end near days' low at 17493 with loss of 265 points (-1.5%). Broader market too reeled under pressure with midcap100/smallcap100 down 2%/1.6% respectively. All the sectors ended in red with metals and Realty falling more than 2%. India ViX gained 4% to 19 level."
He added, "Global markets were weak as dollar index strengthen over hawkish statements made by US Fed Chairman. On the other hand, China's property market continued to be in trouble, which forced China to cut policy rates yet again."
He furtehr added, "Nifty witnessing profit booking on account of concerns over interest rate hike and weakening Indian rupee which could dampen demand as we step into festive season. Nifty fell close to 3% in 2 consecutive days and closed below 17,500 mark. It is taking a pause after the sharp rally of the last eight weeks. Technically the major support for Nifty is currently at 17350 and 17250 zones. In the absence of any domestic trigger, focus has again shifted back to global cues. Even valuations are not supportive at the current levels. Markets are thus likely to consolidate in the near term, till the risk reward turns favourable."
