Domestic equity markets moved decrease on Thursday as international markets slipped on increasing bond yields. Sensex now sits just under 51,000 though the nifty 50 is holding just above 15,000. On Friday morning, SGX Nifty was once again deep down in red, falling 180 points, through the early hours of trade, hinting at a different day of damaging moves on Dalal Street. Equity markets in the United States closed deep in red and Asian peers had been noticed mirroring the move on Friday morning.
Global watch: The technologies-heavy NASDAQ index fell 2.11%, followed by a 1.34% fall in S&P 500, and a 1.11% fall in Dow Jones. The weakness rippled down to Asian stock markets exactly where Shanghai Composite, Hang Seng, TOPIX, Nikkei 225, and KOSAQ had been all in the red.
Bond yields: The 10-year bond yields reached 1.5% in the United States as Fed Chairman Jerome Powell stated that he would be concerned by the disorderly situation in the marketplace. However, Powell did not supply insights on any actions that would be taken to curb yields. 10-year Bond yields had hit 1.6% final week. “The steady growth in the economy leads to a steady rise in the bond yields and therefore the market should start offering discounts in the medium to long term,” stated Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
Technical take: On the charts, one could anticipate additional consolidation just before after once again difficult 15,200, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “The short term uptrend status remains intact and the display of positive market breadth of Thursday signal that the market is not willing to give up easily,” he added. Nifty is however to break the help 14,600-14,700, which may well give it wings to breach 15,400-15,500, stated Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
Levels to watch out: “On Friday, 15050/50750 and 14950/50400 levels will be decisive for the market. The Nifty / Sensex could fall to 14850/50100 or 14750/49800 on a decisive dismissal of 14950/50400. On the upside, the 15250/51300 level would be a big hurdle for the index,” stated Shrikant Chouhan of Kotak Securities.
FII and DII trades: Rising bond yields took some Foreign Institutional Investor (FII) funds away from India as they pulled out Rs 223 crore. Domestic Institutional Investors had been also net sellers of securities. FIIs had been, on the other hand, net purchasers of index solutions worth Rs 13,081 crore.