Domestic equity markets moved lower on Thursday as global markets slipped on rising bond yields. Sensex now sits just below 51,000 while the nifty 50 is holding just above 15,000. On Friday morning, SGX Nifty was again deep down in red, falling 180 points, during the early hours of trade, hinting at another day of negative moves on Dalal Street. Equity markets in the United States closed deep in red and Asian peers were seen mirroring the move on Friday morning.
Global watch: The technology-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 where Shanghai Composite, Hang Seng, TOPIX, Nikkei 225, and KOSAQ were all in the red.
Bond yields: The 10-year bond yields reached 1.5% in the United States as Fed Chairman Jerome Powell said that he would be concerned by the disorderly condition in the market. However, Powell did not offer insights on any steps that would be taken to curb yields. 10-year Bond yields had hit 1.6% last 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,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
Technical take: On the charts, one could expect further consolidation before once again challenging 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 yet to break the support 14,600-14,700, which might give it wings to breach 15,400-15,500, said 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,” said 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 were also net sellers of securities. FIIs were, however, net buyers of index options worth Rs 13,081 crore.
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