Mumbai, March 18 (IANS) Fears of domestic resurgence of Covid-19 infections, along with global inflation as indicated by high bond yields, pulled down India's key equity indices on Thursday. While US bond yields jumped up to 1.6639 per cent, the country reported a spike in new Covid-19 cases, which was the highest since December 2020. In the initial phase of day's trade, both key indices had a gap up opening after the US Fed said despite a rise in inflation, the growth will be the highest in the nearly 40 years. Besides, the US Fed confirmed no hike in policy rates, which has come as a big positive for the markets globally. Globally, equities in Asia and Europe rallied after the Federal Reserve's announcements. On the domestic side, a single-day increase of over 35,800 Covid-19 cases in India, the highest since December 6, 2020, made the market nervous. This led Nifty to give up all its intraday gains. However, FII inflows on Thursday pumped in Rs 1,258.47 crore. Among sectors, IT, pharma, PSU bank, realty fell the most while FMCG, and metals rose. The 30-scrip S&P BSE Sensitive Index (Sensex) traded at 49,216.52 points, down by 585.10 points, or 1.17 per cent, from its previous close. The broader 50-scrip Nifty at the National Stock Exchange (NSE) closed in the red too. It traded at 14,863.30 points, lower by 163.45 points, or 1.11 per cent, from its previous close of 14,557.85 points. "Indian markets continue to perform the worst in the region as resurgence of Covid-19 has led to fears of the momentum in the economy slowing down," said Deepak Jasani, Head of Retail Research at HDFC Securities. "A close below 14,529 would mean that the Nifty is in the midst of an intermediate correction. 14,281-14,478 could be the support band for the Nifty while 14,639-14,696 could provide resistance." Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said: "Global cues were positive early morning led by a significantly positive outlook for the US economy by the US Fed, and pledge to keep the interest rate near zero. In fact, the US Federal Reserve projected the US economy to grow by 6.5 per cent in 2021 - the largest annual output growth since 1984." "However, the global markets could not sustain the gains, and came off later as US 10-year yield recorded a steep uptick of 5 per cent - hitting its highest level in over a year." "The Indian market has been in a corrective phase for the past 10 days, due to factors like high bond yields in the US, a slew of QIPs and IPOs taking away liquidity from the system and increased no of covid cases being reported across the country." Vinod Nair, Head of Research at Geojit Financial Services, said: "Indian equities pared its early optimism and fell into a sharp correction as US bond yield rose to its highest level since January. Dovish comments from the Fed chief on the strong economic bounce back and continuation of its accommodative stance, could not weigh down the rally in the US bond market." "Indian markets had witnessed higher volatility compared to its global peers as domestic investors turned extra cautious on increasing Covid cases in India and a fall in FII inflows."
Market falls on Covid resurgence, bond yields; IT stocks tumble
- by Rinku
- March 18, 2021 2 minutes
Bombay Stock Exchange. (File Photo: IANS)