Nifty 50 and Sensex Decline Amid Rising Bond Yields and Policy Caution

Nifty 50 and Sensex Decline Amid Rising Bond Yields and Policy Caution

VoM News Desk | October 4, 2023 | 05:27 PM IST | Breaking News | Follow on Google News

Nifty 50 and Sensex Decline Amid Rising Bond Yields and Policy Caution

Nifty 50 and Sensex Decline Amid Rising Bond Yields and Policy Caution

The Nifty 50 and the Sensex, India’s benchmark stock indices, continued their downward trend for the second consecutive session. The decline comes amid a global selloff in bond markets, leading to a sharp rise in bond yields, including the US 30-year Treasury yields reaching 5 percent for the first time since 2007 and Germany’s 10-year borrowing costs hitting 3 percent.

Awaiting RBI MPC Outcome

Additionally, the caution prevailed in the market ahead of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting outcome, scheduled for Friday, October 6. Investors are keen to hear the central bank’s stance on inflation and economic growth.

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Market Performance

The Nifty 50 commenced the day at 19,446.30 and dipped approximately 1 percent, reaching an intraday low of 19,333.60. Meanwhile, the Sensex opened at 65,330.65, declining nearly 1 percent to an intraday low of 64,878.77. The Nifty 50 concluded the day at 19,436.10, down 0.47 percent, and the Sensex closed with a loss of 0.44 percent at 65,226.04.

Mid and Small Caps Underperform

Midcap and small-cap indices underperformed the benchmarks, with the BSE Midcap index registering a loss of 1.52 percent, and the BSE Smallcap index falling by 0.96 percent.

Market Capitalization Decline

The overall market capitalization of firms listed on the BSE decreased to approximately ₹316.7 lakh crore from ₹319.2 lakh crore in the previous session, resulting in a loss of around ₹2.5 lakh crore in a single day.

Distance from All-Time Highs

Both the Sensex and the Nifty 50 are down about 4 percent from their all-time highs, which they reached on September 15, 2023.

Crude Oil and Rupee Performance

Crude oil prices also experienced a decline of over 1 percent due to concerns over weak demand. Brent crude traded at around $90 per barrel. Meanwhile, the rupee fell by 4 paise to close at 83.24 per dollar.

Top Gainers and Losers

Top gainers in the Nifty index included Adani Enterprises (up 3.23 percent), Nestle India (up 3.03 percent), and Eicher Motors (up 1.63 percent). The top losers were Axis Bank (down 4.72 percent), SBI (down 2.94 percent), and NTPC (down 2.38 percent).

Sectoral Indices

Most sectoral indices ended with losses, with the Nifty PSU Bank index recording the highest loss at 2.83 percent, followed by Nifty Realty (down 1.73 percent), Media (down 1.72 percent), and Healthcare (down 1.69 percent). Other sectors like Pharma, Auto, and Metal also saw declines of over 1 percent each.

Experts’ Views

Experts pointed out that global investors are withdrawing funds from Indian equity markets due to the ongoing rally in the US dollar and bond yields, making emerging market assets less attractive. The strong US job data and rising US bond yields are signaling an imminent interest rate hike, causing global investors to adopt risk-averse strategies.

Technical Analysis

From a technical perspective, the Nifty 50’s crucial support zone is at 19,320 – 19,360, with multiple indicators suggesting potential support in this range. The hourly momentum indicator is on the verge of providing a positive crossover, signaling the possibility of a pullback rally. Resistance levels are expected around 19,520 – 19,560.

For day traders, a key support level to watch is 19,380, with a potential pullback rally to 19,500-19,550 above this level. Conversely, a drop below 19,380 could accelerate selling pressure, potentially leading to levels of 19,330-19,300.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.