Market dynamics have become highly complex with an uncertain cocktail of positive & negative factors. The market direction in the short-term will be decided by either the positive or negative factors gaining traction, going forward. Investors will have to wait and watch, said an analyst.
“The smart rebound in economic activity, sharp decline in crude by 7 per cent overnight, reaffirmation of accommodative monetary stance by the Fed & resumption of FII buying are clear positives. But the second wave of Covid, particularly in the economically crucial state of Maharashtra, the rise in US bond yield above 1.7 per cent and sustained DII selling are negatives,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Factors driving markets
Crude oil: Prices plunged 7 per cent on Thursday, falling for a fifth day in a row amid concerns about slowing vaccination programmes in Europe, even if infections have plummeted in the United States, the worst-hit country and biggest crude consumer.
Bond yield: The yield on the US 10-year Treasury note on Thursday rose above 1.75 per cent for the first time in 14 months after the Federal Reserve pledged to look past inflation and keep interest rates near zero until at least 2024.
BoE split: The Bank of England said Britain’s economic recovery was gathering pace but policymakers were split over the prospects for longer-term improvement, dampening speculation about a reversal of stimulus.
How are bluechips doing
After opening in the red, benchmark indices continued to trade lower. At 9.40 am, BSE flagship Sensex was down 425 points or 0.86 per cent to 48,816. NSE benchmark Nifty followed and declined 147 points or 1.01 per cent to 14,410.
In the 50-share pack Nifty, HCL Tech was the biggest gainer, up 1.08 per cent. Nestle India, Bharti AIrtel, ITC, SBI Life Insurance, HUL and Kotak Mahindra Bank were among other gainers.
Tata Motors was the top loser in the pack, down 3.79 per cent. ONGC, L&T, GAIL, Bajaj Finance, Hindalco, M&M, Maruti Suzuki, Adani Ports and Tata Steel were other losers in the pack.
Broader market indices were hammered, underperforming their headline peers in morning trade. Nifty Smallcap was down 3.01 per cent while Nifty Midcap tumbled 2.32 per cent. Broadest index on NSE, Nifty 500 was down 1.60 per cent.
Dixon Tech and India Energy Exchange were only gainers from the space while Sterlite Tech, SpiceJet, Century Ply, Future Retail, Aditya Birla Capital and Adani Total Gas were under selling pressure.
Equities were also choppy as a pullback on Wall Street knocked Japan’s Nikkei down 0.7 per cent and South Korea 1 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan followed with a fall of 0.5 per cent.
Nasdaq futures edged up 0.1 per cent, after a sharp 3 per cent drop overnight, while S&P 500 futures added 0.2 per cent.