Sensex slumps 487 points as RIL, banks drag

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March 13, 2021 1:00 AM

This is mainly because of the erratic movement in bond yields in the US. The US 10-year treasury yields touched 1.6% once again on Friday. This may lead to rising inflation in the US which could prompt central banks to raise interest rates.

The Nifty declined by 143.85 points (0.95%) to close at 15,030.95 while the Sensex closed at 50,792.08.The Nifty declined by 143.85 points (0.95%) to close at 15,030.95 while the Sensex closed at 50,792.08.

Snapping its three-session rising streak, the Sensex tumbled 487 points on Friday as investors offloaded RIL, banks and auto stocks after a spike in US bond yields triggered a global sell-off. The Nifty declined by 143.85 points (0.95%) to close at 15,030.95 while the Sensex closed at 50,792.08. Despite the fall on Friday, markets posted weekly gains.

Markets, which started the session with a gap-up opening, failed to hold on to strong gains as selling in financial stocks and sombre global cues dragged the indices. While the stock markets ended this week in gains they have been witnessing selling pressure at higher levels.

This is mainly because of the erratic movement in bond yields in the US. The US 10-year treasury yields touched 1.6% once again on Friday. This may lead to rising inflation in the US which could prompt central banks to raise interest rates.

Rusmik Oza, head of fundamental research, Kotak Securities, said: “Going by the recent moves, there is selling pressure at higher levels which is capping the gains in Nifty-50. Bond yields are moving erratically, which could keep volatility on the higher side. All eyes will be on the Fed action going forward.” He said though the European bond yields have come off sharply, the US 10-year bond yield is still trading at the yearly high level of 1.6%.

Insurance stocks among financials were the biggest losers on the Nifty, followed by automobile stocks. The cyclical stocks also witnessed major selling. The broader markets, too, were under pressure. The biggest losers on the Nifty were Bajaj Auto, Adani Ports and SEZ, HDFC Life, SBI Life, and Hindalco, down by 3.01%, 2.97%, 2.67%, 2,66%, and 2.6%. The biggest gainers on the Nifty were BPCL, IOC, Powergrid Corporation, JSW Steel and Titan, up by 3.05%, 2.58%, 2.25%, 0.91%, and 0.8%.

Market experts have cautioned investors against volatility going forward on account of rising bond yields abroad. However, they are optimistic on the long-term structure of the markets. Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said, “While the long-term structure of the market continues to remain positive, we believe that markets may face some hurdles in the near term till the concerns over the rising bond yields, commodity prices and risk of increase in inflation recede.”

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