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    Sensex crashes 826 points! US bond yields & other factors behind the bloodbath

    Synopsis

    The 50-pack Nifty slipped below 19,300 mark on 1.35% slide in the index, its BSE counterpart Sensex lost 800 points and gave up the 65,000 mark.

    Bloodbath on D-Street! Sensex plunges 826 pts as US bond yields cross the 5% mark
    Sharp selling gripped Indian benchmark indices on Monday, after the US Treasury yield crossed above the 5% mark. The selloff, which engulfed, other global peers too, deepened amid the ongoing war between Israel and Hamas.

    Today's bloodshed on Dalal Street wiped off Rs 7.56 lakh crore of investor wealth, with the BSE market cap sliding to Rs 311.33 lakh crore.

    The 30-share BSE benchmark Sensex fell 826 points or 1.26% to settle at 64,572. The broader NSE Nifty plunged 261 points or 1.34% to end at 19,282.

    "Despite the healthy performance of private banks and marginal reductions in oil prices, investor confidence remained pessimistic, and a widespread consolidation persisted in the domestic markets. Increased apprehensions surrounding prolonged elevated interest rates fuelled a continued upward movement in the US 10-year yield. While a period of consolidation in the short term seems certain, the extent of this phase will be shaped by global factors," Vinod Nair, Head of Research at Geojit Financial Services.

    Here are 4 top reasons for the fall in domestic headline indices:


    US bond yields
    The yield on the benchmark 10-year US treasury note rose above 5% on Monday, hitting the July 2007 milestone that it briefly attempted to scale last week. The run-up in yields on the 10-year Treasury bond, seen as a safe-haven in times of economic uncertainty and a benchmark for borrowing costs around the world, has been driven by investors pricing in stronger US growth as well as fiscal slippage. The 10-year yield touched 5.004% on Monday, up around 8 basis points (bps) on the day. It was briefly bid at a 16-year high of 5.001% on Thursday. It has risen 160 basis points since mid-May.

    Israel-Hamas Conflict
    Higher risks of broader conflict in the Middle East clouded market sentiment, sending indices across Asia and Europe lower. On Saturday, Israel announced its intention to step up its attacks on the Gaza Strip in preparation for the next stage of its war on Hamas. Israel's military spokesman has urged residents of Gaza City to head south in order to ensure their safety.

    Global Markets Bleed
    Stocks staged a broad retreat after the 10-year Treasury yield topped 5%, fueling concern that soaring borrowing costs will erode economic growth. The yield on the 10 year jumped nine basis points to 5.01%, the highest since 2007. Europe’s Stoxx 600 index sank 0.8%, reaching the lowest intraday level since March. S&P 500 equity futures fell 0.6%.

    Oil Continues To Boil
    Even as oil prices slipped on Monday, they continued to remain above $90 mark. Brent crude futures fell 24 cents, or 0.26%, to $91.92 a barrel. US West Texas Intermediate crude futures were down 36 cents, or 0.41%, at $87.72 a barrel.



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    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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