Indian equities continued to witness selling for the second consecutive session. After rising sharply in early trade, Indian markets fell today amid excessive volatility. The blue-chip NSE Nifty 50 index fell 0.95% to close at 15,030, after rising to 15,336 and the Sensex fell more than 750 points
Rising bond yields have been keeping equities under the pressure of late. At present, the yield on 10-year bonds in India is over 6.20 % after almost a year of low interest.
Globally, investors are concerned about the prospects of rising inflation due to excess liquidity and rising bond yields.
At home, retail inflation, or the Consumer Price Index (CPI), for the month of February 2021 climbed to 5.03 per cent from January’s 4.1 per cent. The sharp reversal in the CPI inflation reflects the potential inflationary pressures in the economy.
The Index of Industrial Production (IIP) contracted by 1.6 per cent in the month of January, after going up 1.6 per cent in December 2020, fanning worries while inflation is rising, growth is losing momentum.
A sudden spike in Covid cases and reports of lockdowns in some areas also weighed on market sentiment.
The Nifty has broken its support at 14,850 and now there is a possibility that it goes to touch 14,500 level.