The BSE Sensex plunged nearly 750 points in early trade, before recovering some ground. By 9:24 am, the index was quoting at 50,855.03, down 589.62 points or 1.15 per cent. Nifty50 came close to losing the 15,000 but recovered later. The index was later ruling at 15,081.05, down 164.55 points or 1.08 per cent.
Analysts said as long the Nifty stays above 15,000, the bias may remain positive.
“Bond yields are now exerting a major influence on stock prices, globally. After spiking to 1.6 per cent on February 25, the US 10-year yield fell to 1.4 per cent, only to rise again to 1.48 per cent on Wednesday, impacting equity markets. In India, this has been a ‘Buy on dips’ market and it is likely to remain so till a major correction pulls it down. This will happen only when FPIs turn sellers on a sustained basis,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Midcap and smallcap indices fared better than largecaps, edging up to 0.3 per cent lower.
“At present, mid-small-caps appear strong since money is moving into this segment on valuation comfort,” Vijayakumar said.
Among stocks, HDFC declined 2.44 per cent to Rs 2,588.20. HDFC Bank dropped 2.38 per cent to Rs 1,548.75. Bajaj FInserv, Axis Bank, Kotak Mahindra Bank, Larsen & Toubro and IndusInd Bank declined 1-2 per cent.
Globally, Japan’s Nikkei plummeted 2.85 per cent, Hong Kong’s Hang Seng declined 3.01 per cent while Korea’s Kospi fell 1.76 per cent. China’s Shanghai Composite also fell 1.58 per cent.
The markets were keenly awaiting US Federal Jerome Powell’s speech due later in the day. Many Fed officials have in the past downplayed the rise in treasury yields in recent days, but Fed Governor Lael Brainard on Tuesday acknowledged concerns over the possibility a rapid rise in yields could dampen economic activity.
On Wednesday, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 2,088.70 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 392.91 crore, according to the data.
