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Wednesday, October 27, 2021

India Stocks Review: Fall 1% as high US bond yields lure FIIs

Informist, Wednesday, Oct 6, 2021

 

By Vaibhavi and Ankika Biswas

 

MUMBAI – The benchmark indices were unable to sustain early gains and fell nearly 1% today as investors, largely foreign investors, were lured by a surge in US bond yields.

 

The trigger for the US bonds was resumption of upward trend in crude oil prices and their rise to multi-year highs. The 10-year US bond yield rose 1 basis point and was above 1.5%, as rise in oil prices stoked concerns about inflation.

 

“The global backdrop is indeed a somewhat worrisome one, with surging energy prices meeting slowing demand conditions, and a global supply chain crunch across basic materials,” said S. Hariharan, head of sales trading at Emkay Global Financial Services.
 

“Should global central banks respond to rising inflation expectations by paring bond purchases and tightening monetary conditions, it could act as a trigger for sudden re-pricing of risk assets across the board.”

 

Selling was broad-based, with all the frontline sectors registering sharp losses. The Nifty 50 closed nearly 1% lower at 17646 points, after hitting an intraday high of 17884.60 points. Similarly, the 30-stock Sensex ended 0.9% lower at 59189.73 points, after testing an intraday high of 59963.57 points.

 

While the inherent resilience had been the key factor behind the domestic market’s continued outperformance to its other emerging market peers, such was not the case today. Most headline indices in Asia closed 0.5-1.8% lower, in line with the near 1% fall in the domestic indices.

 

The near 6% jump in the ‘fear’ gauge, India VIX index, after falling for four sessions, indicated that the risk appetite among investors had taken a hit.

 

Not only large-cap stocks but even the small- and mid-cap ones succumbed to selling pressure, which analysts cited as a concern for the market. Most small-cap and mid-cap indices on the National Stock Exchange were down around 1%.

 

GAINERS & LAGGARDS

 

Even when an improved outlook for the domestic financial sector by Moody’s Investors Service  led to continued buying in the banking pack, profit booking set in later, making the Nifty Bank index snap a two-day winning streak. The index closed 0.6% lower at 37521.55 points.

 

Reliance Industries succumbed to profit booking as the stock had risen nearly 4% for three straight sessions. The stock fell below the 2,600-rupee mark after ending above that level on Tuesday. The stock today closed nearly 2% lower at 2,559.85 rupees.

 

Profit booking saw Godrej Consumer Products close over 2% lower. The stock had risen earlier in the day in reaction to the positive growth outlook by the company for its India business. The company had said that volume growth and calibrated price hikes will help sales grow in double digits in Jul-Sep.

Among the major gainers, Hindustan Copper surged more than 11% during the day and hit an over one-month high, as reports of parent company Vedanta looking to buy the government’s stake in the copper producer resurfaced. However, shares of Vedanta closed nearly 4% lower at 290.95 rupees.

 

Shares of Multi Commodity Exchange rose nearly 5% to an over one-month high intraday on reports that the Securities and Exchange Board of India might allow trading in options on commodity indices.

 

Strong volume growth in the company’s headline products in Jul-Sep pushed shares of Marico to an all-time high of 590 rupees.

 

Meanwhile, shares of oil companies such as Oil and Natural Gas Corp and Oil India extended their gains from Tuesday and closed more than 2% higher each, as Brent crude oil price touched a three-year-high and were near $83 a barrel.

 

However, the overall market breadth was weak and the number of declines on NSE outnumbered the advances.

 

* Among Nifty 50 stocks, 8 rose and 42 fell

* Among Sensex stocks, 3 rose and 27 fell

* On the NSE, 693 stocks rose, 1,294 fell and 67 were unchanged

* On the BSE, 1,443 stocks rose, 1,847 fell and 156 were unchanged

* Nifty Bank: Down 0.6%; Nifty IT: Down 1.32%; Nifty Metal: Down 2.98%

—————————————————————————————–

BSE                                              National Stock Exchange
Sensex: 59189.73, down 555.15 pts (0.9%)           Nifty 50: 17646, down 176.30 pts (1%) 
—————————————————————————————–

S&P BSE Sensitive Index                          Nifty 50
Lifetime High: 60412.32 (Sep 27)                : Lifetime High: 17947.65 (Sep 24)
Record Close High: 60077.88 (Sep 27)            : Record Close High: 17855.10 (Sep 27)
2021 1st day close: 47868.98 (Jan 1)            : 2021 1st day close: 14018.5 (Jan 1)
2021 Closing High: 60077.88 (Sep 27)            : 2021 Closing High: 17855.10 (Sep 27) 
2021 Closing Low: 46285.77 (Jan 29)             : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 60412.32 (Sep 27)         : 2021 High (intraday): 17947.65 (Sep 24)
2021 Low (intraday): 46160.46 (Jan 29)          : 2021 Low (intraday): 13596.75 (Jan 29)

2020 Closing High: 47751.33 (Dec 31)            : 2020 Closing High: 13981.95 (Dec 30)
2020 Closing Low: 25981.24 (Mar 23)             : 2020 Closing Low: 7610.25 (Mar 23)
2020 High (intraday): 47896.97 (Dec 31)         : 2020 High (intraday): 14024.85 (Dec 31)
2020 Low (intraday): 25638.90 (Mar 24)          : 2020 Low (intraday): 7511.10 (Mar 24)
2019 High (intraday): 41809.96 (Dec 20)         : 2019 High (intraday): 12293.90 (Dec 20)
2019 Low (intraday): 35287.16 (Feb 19)          : 2019 Low (intraday): 10583.65 (Jan 29)
2018 High (intraday): 38938.91(Aug 28))         : 2018 High(intraday): 11760.20 (Aug 28)
2018 Low (intraday): 32483.8 (Mar 23)           : 2018 Low (intraday): 9951.9 (Mar 23)
2017 High (intraday): 34005.37 (Dec 26)         : 2017 High(intraday): 10515.10 (Dec 26)

—————————————————————————————–

End

 

Edited by Ashish Shirke

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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Source: Cogencis

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