The Indian stock market saw a sharp sell-off today , with benchmark indices Sensex and Nifty tumbling more than 1% i. The Sensex plunged over 900 points to touch an intraday low of 80,591.68 while the Nifty slipped nearly 300 points to hit 24,509.10.
Let’s take a look at what is dragging the market down-
Global cues turn sour: US fiscal worries spook investors
Asian markets took a beating today, mirroring overnight losses on Wall Street. Investors across the globe are rattled by growing concerns about the US economy. A weak 20-year US government bond auction has sparked fears about America’s fiscal health, especially after Moody’s recently cut the country’s credit outlook.
Donald Trump’s push for more tax cuts has added fuel to the fire, raising alarms about the already ballooning federal deficit. Rising yields on US government bonds (5-year, 10-year, and 30-year) also raises concern amongst investors
US Bond yields rise, spelling trouble for emerging markets
One of the biggest underlying factors behind today’s market fall is the spike in US bond yields. Typically, rising US yields lead to outflows from emerging markets like India, as investors chase safer returns in US assets.
“Rising US bond yields are usually negative for emerging markets. But the situation is slightly different now. The root cause of the problem is the unsustainable US fiscal deficit and debt. This may trigger some capital flows away from the US to other economies where prospects for growth and earnings are better,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
FMCG, IT, Auto sectors bleed in early trade
Back home, the pain was visible across key sectors. The Nifty FMCG index dropped around 1.5%, led by a 5% slump in Colgate Palmolive. Heavyweights like Emami, Hindustan Unilever, Nestle India, and ITC also lost between 1.5% and 2%, with only Radico Khaitan bucking the trend.
The Nifty Auto index was not spared either, slipping over 1%. Stocks like M&M, Eicher Motors, Bajaj Auto, TVS Motors, and Tata Motors were all trading deep in the red.
In the IT space, the story was the same. The Nifty IT index fell by 1.5%, with Tech Mahindra being the biggest drag, down nearly 2%. Other notable losers included HCL Tech, Mphasis, Persistent, and Infosys, all sliding between 1% and 2%.