Indices fall 1% on rising US bond yields, lockdown fears
BEAR TURN Sensex slips 487.43 points, Nifty down 143.85 points, though both managed to record 2nd consecutive weekly gains. Volatility index climbs 4.6% to end at 21.71
By ET Bureau | Updated:
“Hardening of bond yields has also impacted sentiment despite stimulus being announced in the US- both 10-year and 30-year bonds,” said Jani.
Mumbai: Stock indices fell 1% on Friday, giving up early gains on the back of a rise in bond yields in US and Europe and surge in India coronavirus cases that has triggered fear of fresh lockdown.
The Sensex slipped 487.43 points, or 0.95%, to close at 50,792.08 and the Nifty fell 143.85 points, or 0.95%, to close at 15,030.95. However, both indices managed to log a second consecutive weekly gain.
The volatility index India VIX, which measures the market’s perception of risk in the near term, climbed 4.6% to end at 21.71 on Friday.
“The charts are showing there is some resistance occurring near the highs. We may not immediately go beyond 15300 in the near term,” said Rohit Srivastava, founder, Indiacharts.com.
“There is some seasonal pressure because it is the financial year end, so a short-term correction is likely,” said Srivastava.
The signing of the US stimulus bill had lifted indices by nearly 1% earlier in the day before concern over rising bond yields weighed the market down.
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On Friday, foreign portfolio investors were net sellers of Indian shares worth `942.6 crore while DIIs net sold local shares worth `164 crore, provisional data on the NSE showed. “The net FII flows have not been very significant for the past two weeks despite global markets being strong and the stimulus in the US. It is very difficult for the market to continue moving up without the support of FII flows, which have been strong for the last ten months,” said Hemang Jani, head of equity strategy— broking and distribution at Motilal Oswal.
“Hardening of bond yields has also impacted sentiment despite stimulus being announced in the US- both 10-year and 30-year bonds,” said Jani.
Auto makers, Reliance Industries and financials were the biggest laggards of the day. Bajaj Auto, Maruti Suzuki India, ICICI Bank, Sun Pharmaceutical Industries and Reliance Industries ended down 2-3%, worst hit among Sensex constituents. Among financials, IDBI Bank was an outlier as the stock ended up nearly 10% after the Reserve Bank of India on Wednesday said it would take the PSU bank out of its corrective action list.
