1 hr ago
Sensex, Nifty Hit Six-Month Lows as Global Fears Rise
Indian stocks fell sharply and reached their lowest levels in about six months.
The market’s fear indicator, India VIX, also increased.
Oil became more expensive after Donald Trump rejected a possible peace agreement involving Iran.
Costlier oil can worry investors because it may increase inflation.
The US dollar strengthened, which often makes emerging-market stocks less attractive.
Foreign investors sold a large amount of Indian shares.
Higher bond yields also made bonds more appealing compared with stocks.
Investors are additionally worried that central banks may raise interest rates to control inflation.
The Sensex and Nifty fell to six-month lows, while India VIX rose 5.53% to 14.39.
Brent crude climbed 1.89% to $107.27 a barrel after Donald Trump rejected an Iran peace deal.
Foreign portfolio investors sold ₹5,353.22 crore of Indian equities on Monday, with September outflows reaching ₹20,695 crore.
India’s 10-year bond yield stood at 7.16%, while the US 10-year yield reached 5.25%.
Analysts cited a stronger dollar, rising yields, possible interest-rate hikes and quarter-end FII rebalancing as additional pressures.
- Who
- Indian equity investors, foreign portfolio investors, global central banks and market analysts, including V K Vijayakumar, Hemang Gor and SBI Securities.
- What
- The Sensex and Nifty declined to six-month lows, while India VIX rose 5.53% to 14.39.
- Where
- Indian stock markets, amid pressure from global markets and economic conditions in the United States and elsewhere.
- When
- The market session described as today; provisional FPI selling data cited is from Monday.
- Why
- Rising crude oil prices, a stronger US dollar, foreign-investor selling, higher bond yields and expectations of interest-rate hikes weighed on equities.
Key facts
- India VIX
- Rose 5.53% to 14.39.
- Brent crude
- November delivery rose 1.89% to $107.27 per barrel.
- FPI selling
- Provisional Monday data showed ₹5,353.22 crore of equity sales.
- September FPI outflows
- Foreign portfolio investors sold ₹20,695 crore of Indian equities so far in September.
- India 10-year yield
- Stood at 7.16%.
- US 10-year yield
- Stood at 5.25%.
- Falling Sensex stocks
- Twenty-seven of the 30 Sensex constituents declined.
Quotes
V K Vijayakumar
Chief Investment Strategist at Geojit Investments Limited
“The rate path has firmed up across the Pacific too, with a sudden influx of foreign capital, semiconductor demand, and a tottering JPY spiking inflation and increasing the clamour for a BoJ rate hike. Clearly, the present mix of economic conditions is unstable and something will have to give.”
businesstoday.in
“With Brent crude above $107 and the US 10-year at 5.25 per cent, the global macro construct continues to be unfavourable for equity markets. The emerging macro scenario in the US appears to be one of high growth and high inflation.”
businesstoday.in
Sources
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