Indian equities remained under heavy pressure for a second straight session, as rising global bond yields and continued foreign portfolio investor selling weakened market sentiment. Investors were also assessing the effect of the Reserve Bank of India's latest monetary policy.
By 2:30 AM PM, the Sensex had fallen 1,147.58 points, or 1.58%, to 71,491.12. The Nifty 50 declined 393.80 points, or 1.74%, to 22,209.25 after touching 22,254.30 during the session.
The benchmarks had opened broadly steady, showing a mixed trend before selling pressure increased. The decline followed weakness across global equity markets after bond yields continued to rise.
Sector performance
Metal stocks recorded the sharpest decline among the sectors listed, with the Nifty Metal index down 3.23%. Oil and gas stocks fell 2.60%, while realty declined 2.39%.
Healthcare stocks dropped 2.21%, and the Nifty 500 Healthcare index was lower by 2.29%. The Nifty Pharma index declined 2.13%.
The Nifty FMCG index fell 1.81%, while auto stocks lost 1.78%. Media declined 1.71%. Metal, consumer durables and chemicals had shown mild strength earlier in the morning.
Policy and global market pressure
Market analysts linked the pressure on equity valuations to the RBI's “calibrated tightening” stance and a 25-basis-point increase in the repo rate. Higher interest rates can make fixed-income investments relatively more attractive, according to the market commentary included in the report.
The report said experts expected investor interest in sectors such as pharmaceuticals to increase in such conditions because their performance is considered relatively less sensitive to interest rates.
Despite elevated valuations, growth stocks continued to attract investor interest, while value stocks had performed relatively weakly. Analysts also said continued selling by foreign portfolio investors was keeping pressure on large-cap shares.
Another factor highlighted by market participants was the US 10-year Treasury yield remaining above 5.3%. The combination of overseas yield pressure, foreign selling and domestic monetary-policy concerns kept the broader market tone weak.
What investors were watching
The session's decline reflected several pressures operating at the same time: global bond-market movements, the RBI's policy approach and foreign fund flows. Sector losses were broad, although the report noted that some groups had shown mild strength earlier in the day.
The available market update recorded intraday levels and sector performance at 2:30 AM PM. It did not provide a separate closing level beyond those figures.
Conclusion
The Sensex and Nifty 50 remained under pressure for a second consecutive session, with global bond yields, the RBI's policy stance and foreign investor selling weighing on sentiment. Metal, healthcare, realty and oil-and-gas stocks were among the weaker areas.
Frequently Asked Questions
Q. How much did the Sensex fall?
The Sensex fell 1,147.58 points, or 1.58%, to 71,491.12 by 2:30 AM PM.
Q. Where did the Nifty 50 stand?
The Nifty 50 was at 22,209.25, down 393.80 points, or 1.74%, by 2:30 AM PM.
Q. Which sector recorded the biggest decline listed in the report?
The Nifty Metal index recorded the largest decline listed, falling 3.23%.
Q. What happened to healthcare stocks?
Healthcare stocks fell 2.21%, while the Nifty 500 Healthcare index declined 2.29%.
Q. What factors were linked to the market decline?
The report linked the decline to rising global bond yields, the RBI's monetary-policy stance and continued foreign portfolio investor selling.
Q. What was the reported change in the repo rate?
The report referred to a 25-basis-point increase in the repo rate.
Q. How did the US 10-year Treasury yield feature in the market commentary?
Market participants said the US 10-year Treasury yield remained above 5.3%, adding to pressure on large-cap shares.
