Yields on benchmark bonds rose almost 9 basis points over the last three days, tracking a sharp rise in US Treasury yields after Federal Reserve indicated sooner-than-expected tapering of its bond purchases and crude oil prices hit $80 per barrel.
Stocks and bond sold off sharply on Tuesday while the rupee lost value falling through the 74-per-dollar mark. The Indian currency gave up 23 paise to close the session at 74.06 against the dollar as weaker Asian peers and massive sell-offs in domestic equities weighed on investor sentiment. Rising crude oil prices also put pressure on the domestic currency and the energy crisis in China continued to weigh on the sentiment.
Yields on benchmark bonds rose almost 9 basis points over the last three days, tracking a sharp rise in US Treasury yields after Federal Reserve indicated sooner-than-expected tapering of its bond purchases and crude oil prices hit $80 per barrel. On Tuesday, the benchmark 6.10%-2031 bond yield ended at 6.2281% against 6.2087% in the previous session.
Bonds gave up their early gains after the Reserve Bank of India (RBI) set a sharply higher cut-off rate at the seven-day reverse repo triggering apprehensions the central bank may start pulling back from its accommodative stance earlier than anticipated.
Sensex fell 410 points on the back of heavy selling in IT, financials and telecom stocks, in line with weak global trends amid a rebound in US bond yields. After plunging over 1,032 points during the session, the 30-share BSE barometer pared some losses to end 0.68% lower at 59,667.60. Nifty fell by 106.50 points or 0.60% to close at 17,748.60, pulled down by Bharti Airtel and Tech Mahindra.
In the Sensex pack, Bharti Airtel was the top loser, shedding nearly 4%, followed by Tech Mahindra, Bajaj Finance, Bajaj Finserv, HCL Tech and Infosys. However, gains in Reliance Industries, Kotak Bank and PowerGrid restricted the losses in the index. NTPC, Sun Pharma, Titan, and Dr Reddy’s were also among the gainers.
Among the sectoral indices, BSE Realty dropped the most by 3.02%, followed by Teck (2.12%) and Telecom (1.98%). However, utilities, power, oil and gas, energy and metal indices ended with gains. The broader midcap and small-cap indices fell up to 0.71%.