Indian benchmark equity indices opened lower on Thursday, dragged by banking and IT stocks, as U.S. fiscal concerns and rising Treasury yields weighed on global investor sentiment.
The BSE Sensex fell 744 points, or 0.91%, to 80,852, while the Nifty50 dropped 237 points, 0.96%, to trade at 24,575 around 10:30 am.
Most Asian markets fell in early trade, following overnight losses on Wall Street, as yields on 20-year U.S. government debt hit their highest level since November 2023.
Investor sentiment has remained fragile since Moody’s downgraded the United States’ credit rating last Friday amid concerns over the country’s rising debt.
Higher Treasury yields typically make bonds more attractive to foreign investors, prompting capital outflows from stocks in emerging markets like India.
From the Sensex pack, Tech Mahindra, Power Grid, HCL Tech, IndusInd Bank, Nestle and M&M were the top laggards, while only Adani Ports and Tata Steel opened with gains.
IndusInd Bank shares slid 5.9% in early trade after the lender reported a consolidated net loss of Rs 2,329 crore in Q4 FY25. The loss was attributed to its derivatives segment. However, the stock recovered soon.
On the sectoral front, Nifty Bank, Auto, FMCG, IT, Pharma, Consumer Durables, and Oil & Gas indices declined between 0.5% and 1.5%. In the broader market, the Nifty Midcap slipped 0.35%, while the Nifty Smallcap edged up 0.1%.
The total market capitalisation of all listed companies on the BSE fell by Rs 2.5 lakh crore to Rs 438.68 lakh crore.
Experts View
"There is a slight risk off in global markets. This is evident from the strength in alternative assets like gold and Bitcoin. The fundamental issue is the high fiscal deficit of the US, which the market feels is unsustainable. The weak US 20-year bond auction and the spike in yields of 5-year, 10-year and 30-year bonds indicate the declining confidence in US bonds. In Japan, too, bond yields are rising," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
"Rising US bond yields are usually negative for emerging markets. But the situation is slightly different now. The root cause of the problem is the unsustainable US fiscal deficit and debt. This may trigger some capital flows away from the US to other economies where prospects for growth and earnings are better," Vijayakumar added.
Mandar Bhojane, Equity Research Analyst at Choice Broking, said, "Nifty may find immediate support at 24,600, followed by 24,500 and 24,400. On the upside, 25,000 will act as the first resistance level, followed by 25,400 and 25,600."
Global Markets
Longer-dated U.S. Treasury yields hit their highest in 18 months on Thursday, while Asian stocks and the dollar slipped as worries of a worsening fiscal outlook in the world's biggest economy weighed on investor sentiment.
The spotlight remains on U.S. President Donald Trump's tax bill that is expected to be voted on this week in Congress and investors are worried it could add about $3.8 trillion to the $36 trillion U.S. debt pile.
That weighed on stocks in Asia, with MSCI's broadest index of Asia-Pacific shares outside Japan 0.5% lower, though still near the seven-month high it touched in the previous session.
Japan's Nikkei was down 0.7% on the stronger yen. China's benchmark index slipped 0.2%, while Hong Kong's Hang Seng index declined 0.8% in early trading.
FII/DII Tracker
On the institutional front, Foreign Institutional Investors (FIIs) were net buyers with inflows worth Rs 2,201.79 crore on May 21. Domestic Institutional Investors (DIIs) also remained net buyers, purchasing equities worth Rs 683.77 crore on the same day.
Also read: Nalco shares surge over 5% after Q4 profit doubles to Rs 2,067 crore on strong aluminium prices
Crude Oil
Oil prices eased on Thursday as unexpected builds in U.S. crude and fuel inventories raised demand concerns, while investors stayed cautious, focusing on renewed Iran-U.S. nuclear talks.
Brent futures slipped 33 cents, or 0.5%, to $64.58 a barrel by 0038 GMT, while U.S. West Texas Intermediate crude dropped 32 cents, or 0.5%, to $61.25. Both benchmarks lost 0.7% on Wednesday.
Rupee vs Dollar
The Indian rupee fell 2 paise to 85.61 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.02% to 99.53 level.
(With inputs from agencies)
The BSE Sensex fell 744 points, or 0.91%, to 80,852, while the Nifty50 dropped 237 points, 0.96%, to trade at 24,575 around 10:30 am.
Most Asian markets fell in early trade, following overnight losses on Wall Street, as yields on 20-year U.S. government debt hit their highest level since November 2023.
Investor sentiment has remained fragile since Moody’s downgraded the United States’ credit rating last Friday amid concerns over the country’s rising debt.
Higher Treasury yields typically make bonds more attractive to foreign investors, prompting capital outflows from stocks in emerging markets like India.
From the Sensex pack, Tech Mahindra, Power Grid, HCL Tech, IndusInd Bank, Nestle and M&M were the top laggards, while only Adani Ports and Tata Steel opened with gains.
IndusInd Bank shares slid 5.9% in early trade after the lender reported a consolidated net loss of Rs 2,329 crore in Q4 FY25. The loss was attributed to its derivatives segment. However, the stock recovered soon.
On the sectoral front, Nifty Bank, Auto, FMCG, IT, Pharma, Consumer Durables, and Oil & Gas indices declined between 0.5% and 1.5%. In the broader market, the Nifty Midcap slipped 0.35%, while the Nifty Smallcap edged up 0.1%.
The total market capitalisation of all listed companies on the BSE fell by Rs 2.5 lakh crore to Rs 438.68 lakh crore.
Experts View
"There is a slight risk off in global markets. This is evident from the strength in alternative assets like gold and Bitcoin. The fundamental issue is the high fiscal deficit of the US, which the market feels is unsustainable. The weak US 20-year bond auction and the spike in yields of 5-year, 10-year and 30-year bonds indicate the declining confidence in US bonds. In Japan, too, bond yields are rising," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
"Rising US bond yields are usually negative for emerging markets. But the situation is slightly different now. The root cause of the problem is the unsustainable US fiscal deficit and debt. This may trigger some capital flows away from the US to other economies where prospects for growth and earnings are better," Vijayakumar added.
Mandar Bhojane, Equity Research Analyst at Choice Broking, said, "Nifty may find immediate support at 24,600, followed by 24,500 and 24,400. On the upside, 25,000 will act as the first resistance level, followed by 25,400 and 25,600."
Global Markets
Longer-dated U.S. Treasury yields hit their highest in 18 months on Thursday, while Asian stocks and the dollar slipped as worries of a worsening fiscal outlook in the world's biggest economy weighed on investor sentiment.
The spotlight remains on U.S. President Donald Trump's tax bill that is expected to be voted on this week in Congress and investors are worried it could add about $3.8 trillion to the $36 trillion U.S. debt pile.
That weighed on stocks in Asia, with MSCI's broadest index of Asia-Pacific shares outside Japan 0.5% lower, though still near the seven-month high it touched in the previous session.
Japan's Nikkei was down 0.7% on the stronger yen. China's benchmark index slipped 0.2%, while Hong Kong's Hang Seng index declined 0.8% in early trading.
FII/DII Tracker
On the institutional front, Foreign Institutional Investors (FIIs) were net buyers with inflows worth Rs 2,201.79 crore on May 21. Domestic Institutional Investors (DIIs) also remained net buyers, purchasing equities worth Rs 683.77 crore on the same day.
Also read: Nalco shares surge over 5% after Q4 profit doubles to Rs 2,067 crore on strong aluminium prices
Crude Oil
Oil prices eased on Thursday as unexpected builds in U.S. crude and fuel inventories raised demand concerns, while investors stayed cautious, focusing on renewed Iran-U.S. nuclear talks.
Brent futures slipped 33 cents, or 0.5%, to $64.58 a barrel by 0038 GMT, while U.S. West Texas Intermediate crude dropped 32 cents, or 0.5%, to $61.25. Both benchmarks lost 0.7% on Wednesday.
Rupee vs Dollar
The Indian rupee fell 2 paise to 85.61 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.02% to 99.53 level.
(With inputs from agencies)
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