4 hrs ago
Crude Oil, Bond Yields Drive Sharp Dalal Street Selloff
Indian stock markets had a very difficult day on Thursday.
The Sensex and Nifty both fell by more than 1.5%.
Many shares, especially banks, financial companies, metal firms, automobile companies and oil-related stocks, lost value.
Investors were worried because oil became more expensive.
They were also concerned that high US bond yields could make borrowing more costly around the world.
A proposed rule change by India’s insurance regulator added pressure to financial and insurance shares.
The proposal could reduce some commissions and distribution expenses.
Shares of several insurers and financial platforms fell sharply.
Overall, far more stocks declined than advanced on the Bombay Stock Exchange.
The BSE Sensex fell 1,247.71 points, or 1.67%, to 73,580.54, its lowest close since June 8.
The NSE Nifty dropped 383.70 points, or 1.64%, to 23,063.10, a more than five-month low.
Financial, metal, auto and oil shares led the broad-based selloff, with 47 Nifty constituents declining.
Investors reacted to surging crude prices, rising US Treasury yields and proposed insurance-distribution rule changes.
Brent crude rose 2.36% to USD 105.40 per barrel, while the US 10-year Treasury yield reached about 5.11%.
- Who
- Indian stock-market investors, financial companies, insurers and other listed businesses were affected.
- What
- The Sensex and Nifty suffered sharp declines in a broad-based market selloff.
- Where
- Indian stock exchanges, including the Bombay Stock Exchange and the National Stock Exchange of India.
- When
- Thursday, with no specific calendar date provided.
- Why
- Markets were pressured by higher crude oil prices, rising US bond yields and proposed tighter insurance-distribution rules in India.
Key facts
- Sensex close
- 73,580.54, down 1,247.71 points or 1.67%
- Nifty close
- 23,063.10, down 383.70 points or 1.64%
- Brent crude
- USD 105.40 per barrel, up 2.36%
- US 10-year Treasury yield
- Around 5.11%
- Insurance proposal
- Lower Expenses of Management limits and tighter controls on commissions were proposed
- Market breadth
- 2,884 BSE stocks declined, 1,473 advanced and 216 were unchanged
- Worst-performing named stock
- PB Fintech fell 35.98%
Quotes
Hariselvan Radhakrishnan
Founder and CEO of HST Wealth
“On the sectoral front, banking and financials came under significant pressure after IRDAI proposed changes to the insurance distribution framework, including lower Expenses of Management limits and tighter controls on commissions. The proposals raised concerns about the earnings and distribution economics of insurers and other related financial intermediaries.”
thehansindia.com
“Indian equity benchmarks closed sharply lower on Thursday, with the Nifty-50 and Sensex both falling more than 1.5 per cent, extending losses through the session after opening with a steep gap-down. The selloff was driven by a combination of surging global bond yields and a sharp rebound in crude oil prices.”
thehansindia.com
Sources
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