1 hr ago
Indian Markets Plunge as US Yields, Crude, Regulation Pressure Stocks
Indian stock markets fell sharply during the day.
The Sensex and Nifty both dropped about 1%.
Investors became worried because interest rates and borrowing costs in the United States may stay high.
US government bond yields rose to their highest level since 2007.
Oil prices also moved above $102 per barrel, which can make imports more expensive for India.
Many smaller companies and several large companies saw their share prices fall.
Insurance companies faced extra selling after a regulator proposed changes to how insurance is distributed.
Together, these global and domestic concerns made investors more cautious.
The Sensex and Nifty fell about 1% in intraday trading as selling spread across broader markets.
The US 10-year Treasury yield reached about 5%, its highest level since 2007, increasing concerns about interest rates and emerging-market assets.
Brent crude rose above $102 a barrel, raising concerns about India’s import costs, inflation, corporate margins and the rupee.
Mid-cap and small-cap indices each declined about 1%, while Bajaj Finance fell more than 5% and several major stocks dropped 1%-4%.
Insurance stocks faced additional pressure after the Insurance Regulatory and Development Authority of India proposed changes to distribution expenses, commissions and transparency.
- Who
- Indian equity investors, major listed companies, and insurance-sector stocks were affected; the Insurance Regulatory and Development Authority of India issued the insurance proposal.
- What
- The Sensex and Nifty fell about 1% amid broad-based selling driven by higher US bond yields, rate-hike concerns, elevated crude prices and insurance-regulation worries.
- Where
- Indian stock markets, influenced by developments in the United States, global oil markets and West Asia.
- When
- Today, during intraday trading; the article also says the US mortgage-rate data was reported on Wednesday.
- Why
- Higher US yields and possible rate hikes increased pressure on emerging markets, while crude above $102 and proposed insurance-distribution changes added domestic concerns.
Key facts
- Sensex and Nifty
- Both declined about 1% in intraday trading.
- US 10-year Treasury yield
- Rose to about 5%, its highest level since 2007; the article also cites a rise to 5.11%.
- Brent crude
- Moved above $102 a barrel.
- Mid-cap and small-cap indices
- The Nifty Midcap 100 and Nifty Smallcap 100 each fell around 1% intraday.
- Largest named stock decline
- Bajaj Finance fell more than 5% intraday.
- Insurance stocks
- PB Fintech hit the 20% lower circuit, while Turtlemint also faced heavy selling.
- Regulatory proposal
- The insurance consultation paper covers distribution expenses, commissions, market conduct and transparency.
Quotes
Dr. V K Vijayakumar
Chief Investment Strategist at Geojit Investments
“The sharp spike in Brent crude above $102 and the US 10-year bond yield rising to 5.11% will weigh on the market today. So long as these two global headwinds remain, the prospects of a smart recovery in the market appear remote.”
financialexpress.com
Sources
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