The market opened at a very low level on Wednesday amid global tensions, rise in bond yields and selling pressure from FIIs. As soon as it opened, the Sensex fell by more than 600 points. Nifty also fell by about 200 points and reached around 23,430. A big fall of 500 points was seen in Bank Nifty. There was heavy selling in metal and auto stocks. Tension between America and Iran seems to be increasing once again, the effect of which is being seen in markets ranging from Asian indices to GIFT Nifty.
Trump’s new threat to Iran
US President Donald Trump has given a new warning to Iran. Trump said that if Iran fails to reach an agreement, the US could attack any time in the next two to three days. This statement has increased tension in global markets.
GIFT Nifty and Asian markets fell
Amid fears of US-Iran conflict, GIFT Nifty was seen trading around 23,400 levels, falling by almost 190 points. Meanwhile, Dow futures were also seen trading down about 50 points. Pressure was also clearly visible in Asian markets; Markets in Japan and South Korea fell about 1% to 1.5%. These indications suggest that the domestic market is likely to have a weak opening.
US markets fall amid rise in bond yields
The sudden rise in bond yields put pressure on US markets. Dow Jones closed down 322 points, while Nasdaq closed down nearly 220 points. This was the third consecutive trading session when the Nasdaq closed at a weak level.
US bond yields and dollar rise
In the US, 10-year bond yields rose to above 4.65%, the highest level in almost 16 months. At the same time, the 30-year bond yield reached its highest level in almost 19 years. The dollar index also remained close to a six-week high, trading around 99.3. A stronger dollar and rising yields could put pressure on emerging markets.
Crude oil above $111
Crude oil prices remained high amid rising tensions around Iran. Brent crude was seen trading above $111 per barrel. Rising oil prices can become a cause of concern for oil importing countries like India.
gold and silver fall
In the domestic market, silver fell by around ₹6,500 to close at around ₹2,70,000. At the same time, gold fell by almost ₹300 and closed around ₹159,000. On COMEX, both gold and silver were seen trading weak for the fourth consecutive day.
FIIs started selling again
After three consecutive days of buying, foreign institutional investors (FIIs) have once again started selling. FIIs sold shares worth about ₹2,457 crore in the cash market, while their total net sales stood at ₹5,334 crore. In contrast, domestic institutional investors (DIIs) bought shares worth about ₹3,800 crore.
Market’s focus on Q4 results
Mankind Pharma reported strong results. Whereas, the performance of Bharat Petroleum Corporation Limited was mixed. PI Industries’ results disappointed the market. Novelis, on the other hand, reported a loss of $84 million in the fourth quarter – a development that may also impact Hindalco Industries. Today, the market’s focus will be on the results of Apollo Hospitals Enterprises and Grasim Industries. Apart from this, the results of Jubilant Foods, Samvardhan Motherson, Samman Capital and Bosch in the F&O segment will also be in discussion.
RBI’s new draft rules
The Reserve Bank of India (RBI) has released a draft of new capital adequacy rules for banks. Under these proposed rules, banks may have to publicly disclose more detailed information about their capital, liquidity and risk management processes. The aim of this initiative is to increase transparency in the banking sector.
Country’s first ‘Weather Futures’ will be launched today
Today, the National Commodity and Derivatives Exchange (NCDEX) is going to launch the country’s first ‘Weather Futures’ contract. This will give agriculture and related businesses a new option for hedging against weather-related risks. This is being considered a big step for the Indian commodity market.