2 hrs ago
Nifty 500 Stocks Slide as Oil and Yields Pressure Markets
Many Indian shares have fallen a lot from their highest prices of the past year.
Some Nifty 500 stocks are down by more than half.
The wider market has been under pressure for more than two years.
Investors have been worried about weak company profits and expensive share prices.
Problems such as tariffs, geopolitical tensions, high oil prices and rising bond yields have added to those concerns.
Oil is especially important for India because the country imports most of what it uses.
Expensive oil can increase inflation and put pressure on the economy and currency.
A weak monsoon could also make food more expensive and reduce spending.
Experts therefore say that a broad market recovery may not happen quickly.
Nifty 500 stocks have fallen as much as about 70% from their 52-week highs.
The Nifty benchmark is down 18% from its 52-week high, while the Nifty 500 is down 9.5%.
Weak earnings, high valuations, foreign outflows, tariffs, geopolitical tensions, oil prices and bond yields have pressured equities.
Brent crude traded near $102 per barrel amid uncertainty over the unresolved US-Iran conflict.
Analysts warn that weak monsoons, higher inflation and rising yields could delay a broad market recovery.
- Who
- Indian equity investors, companies in the Nifty 500, and market analysts including Pankaj Pandey of ICICI Securities and Motilal Oswal Financial Services.
- What
- Indian stocks have declined sharply from their 52-week highs, while analysts warn that a broad recovery may remain difficult in the short term.
- Where
- India’s financial markets, with global pressure linked to West Asia, the United States, Japan and other developed economies.
- When
- The market has been under pressure for more than two years; the article cites data from Friday, 2 October, and describes the US-Iran conflict as being in its eighth month.
- Why
- Weak corporate earnings, premium valuations, foreign capital outflows, high oil prices, geopolitical uncertainty, weak monsoon risks and rising global bond yields are weighing on markets.
Key facts
- Nifty 500 performance
- The index is down 9.5% from its 52-week high of 24,144.20.
- Nifty performance
- The benchmark Nifty is down 18% from its 52-week high of 26,373.20.
- Broad declines
- As many as 270 Nifty 500 stocks have fallen more than 20% from their 52-week highs, while 426 have fallen more than 10%.
- Largest stock declines
- Vedanta, HEG Advanced Materials, Tata Motors Passenger Vehicles, Reliance Power and KPIT Technologies are down between 62% and 68% from their 52-week highs.
- Oil price
- Brent crude traded near $102 per barrel on Friday, 2 October.
- India’s oil imports
- India meets about 85% to 90% of its oil requirements through imports.
- Bond yields
- US 30-year Treasury yields are at their highest level since 2002, while 10-year yields are at their highest since 2007.
Quotes
Motilal Oswal Financial Services
Brokerage firm cited in the article
“If US yields continue to rise, then somewhere down the line, there will be pressure on Indian yields as well. That will have implications across the economy because the RBI could be forced to hike rates, and the entire interest-rate-sensitive segment could get impacted”
livemint.com
“Elevated crude prices and high input costs are adding pressure across transportation, energy and manufacturing, with WPI inflation already near 10%”
livemint.com
Sources
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