Indian shares ended deep in the red once again on Thursday as Fed Chair Jerome Powell’s promise to look past inflation raised long-dated bond yields and steepened the Treasury curve to new 5-1/2 year highs.
The dollar pushed higher helped by rising U.S. Treasury yields after the Federal Reserve said it expects inflation to rise to 2.4 percent in 2021, much higher than the target inflation rate of 2 percent, before slowing to 2 percent in 2022.
Investors worry that if inflation picks up, central banks might respond by raising interest rates, which would cool economic growth.
Likewise, it feared that rising bond yields and a robust outlook for U.S. growth could make foreign investors wary about investing in emerging markets.
The benchmark S&P BSE Sensex ended down 585.10 points, or 1.17 percent, at 49,216.52 – extending losses for the fifth straight session.
The broader NSE Nifty index tumbled 163.45 points, or 1.11 percent, to 14,557.85, with pharma, IT and healthcare stocks pacing the decliners.
Hero MotoCorp, Dr Reddy’s Laboratories, Divis Lab, Infosys and HCL Technologies lost 2-3 percent while ITC surged 4 percent after clarifying reports over demerger as speculative.
Bajaj Auto gained 2.9 percent after the company said it has amended dividend distribution policy.
Hindalco and Grasim rose about 2 percent while Bharti Airtel advanced 1.5 percent after data showed it added three times more subscribers than Reliance Jio in January.
Market Analysis
Sensex, Nifty End Down Over 1 %
2021-03-18 10:50:46
