Stock Market Live: Sensex down 700 points, Nifty below 15,050 as bond yields rise again; banks, metals drag

Stock Market Live: Indian markets were trading over 1 percent lower on Thursday, snapping 3 sessions of gains following weakness in global peers as bond yields rose again. Benchmark U.S. 10-year Treasury yields crept back towards a one-year peak of 1.6 percent hit last week. Domestically, losses were seen across sectors but were mainly led by banks, financials, and metal stocks.

Positive on large-cap IT space; like Infosys, HCL Tech: HDFC Securities

HDFC Securities is constructive on the entire large-cap IT space, said Apurva Prasad, research analyst–IT at the financial services intermediary, on Thursday. “We are constructive on the entire large-cap space. There is a lot of market share gains that Infosys has seen, the large deal trajectory, but at the same time, there is a lot of opportunity for a player like HCL Technologies. Therefore, we do like HCL Tech at the same time as Infosys,” Prasad told CNBC-TV18. “I think some of the efficiency gains that the sector has seen in the past few quarters is going to hold out for much longer. So there are a lot of structural positives that have played out. Therefore, since last year May, we have been quite positive on this space and there is no reason for us to change the stance. We remain optimistic,” said Prasad.

Rising bond yields spook world shares as investors look to Powell

Resurgent worries about rising US bond yields hit global shares on Thursday as investors waited to see if Federal Reserve Chair Jerome Powell will address concerns about the risk of a rapid rise in long-term borrowing costs. The specter of higher US bond yields also undermined low-yielding, safe-haven assets, such as the yen, the Swiss franc, and gold. Benchmark 10-year US Treasuries rose to 1.477 percent as investors bet US inflation could pick up as economic recovery gathers steam, driven by government stimulus and further progress in vaccination programs. ”It is not clear how the Fed wants to deal with bond yields,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities. ”The pace of rises in yields has been far faster than most people have expected and there’s speculation the authorities may be starting to think about tightening their policy

Goldman Sachs continues to bet on Indian IT; says demand drivers are intact

Despite the recent underperformance by Indian IT on concerns about valuations and peak margins, Goldman Sachs in its report said the demand drivers for the sector are intact. The brokerage firm believes that cloud companies like Amazon Web Services (AWS), Microsoft Azure, Google Cloud, etc. are expected to see very strong growth. It estimates a 40% plus growth by AWS as well as Microsoft. The Indian IT companies are technology partners to these cloud companies. So, when these companies do well, it will provide growth to the Indian IT companies as well. Goldman Sachs also said that the Indian IT companies have been actively reskilling employees in acquiring technology capabilities to cater to the cloud companies.

Mahindra Logistics rises more than 10% on the announcement of integrated logistics services with Bajaj Electricals

Bond yields are now exerting a major influence on stock prices, globally. After spiking to 1.6% on 25th Feb, the US 10-year yield fell to 1.4% and yesterday it has again risen to 1.48% impacting equity markets. In India, this has been a ‘Buy on dips’ market and it is likely to remain so till a major correction pulls it down. This will happen only when FIIs turn sellers on a sustained basis. Currently, mid-small-caps appear strong since money is moving into this segment on valuation comfort”

CONCOR moves sharply higher after Jefferies raises target for the stock to Rs 700/sh

Opening Bell: Sensex opens 650 points lower, Nifty below 15,100 as bond yields rise again; banks, metals drag

Indian markets opened over a percent lower on Thursday, snapping 3 sessions of gains following weakness in global peers as bond yields rose again. Benchmark U.S. 10-year Treasury yields crept back towards a one-year peak of 1.6 percent hit last week. Domestically, losses were seen across sectors but were mainly led by banks, financials and metal stocks. At 9:18 am, the Sensex was down 733 points lower at 50,711 while the Nifty fell 219 points to 15,027. Broader markets were also in the red but outperformed benchmark indices with the midcap index down 0.7 percent and smallcap index down 0.2 percent. On the Nifty50 index, Adani Ports, ONGC, Sun Pharma, and Infosys were the top gainers while HDFC Bank, HDFC, Kotak Bank, Axis Bank and Tata Steel led the losses.

Oil prices firm on prospect of OPEC+ maintaining supply cuts, drop in U.S. inventories

Oil prices rose for a second straight session on Thursday, as the possibility that OPEC+ producers might decide against increasing output at a key meeting later in the day underpinned alongside a drop in U.S. fuel inventories. Brent crude futures added 11 cents, or 0.2%, to $64.18 a barrel, as of 0148 GMT, after climbing more than 2% on Wednesday. U.S. West Texas Intermediate (WTI) crude futures were unmoved at $61.28 a barrel. The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, are considering rolling over production cuts into April instead of raising output, as a recovery in oil demand remains fragile due to the coronavirus crisis, three OPEC+ sources told Reuters. The market had been expecting OPEC+ to ease production cuts by around 500,000 barrels per day (bpd) from April.

Dollar bides time, looks to Powell for inspiration

The dollar hit a seven-month high against the yen on Thursday as an orderly rise in U.S. Treasury yields lent support ahead of a speech by Federal Reserve Chairman Jerome Powell that may determine the trend for global bond markets and currencies. The dollar also traded near a three-month high against the Swiss franc and held on to gains against most currencies as a renewed sense of calm in the Treasury market supported sentiment. However, currencies were subdued overall as traders avoided taking out big positions before the speech later in the day. Investors are anxious to see if Powell expresses concern about a recent volatile sell-off in Treasuries and if there is any change in his assessment of the economy before the Fed’s next meeting ending March 17. The dollar may continue to rise against the yen as long as Treasury yields rise at a measured pace.

Sebi asks bourses, clearing corps to put in place mechanism to prevent fraud

Sebi on Wednesday asked stock exchanges, clearing corporations and depositories to put in place code of conduct and institutional mechanism to prevent fraud or market abuse by them and their designated persons. Under this, managing director (MD) / chief executive officer (CEO) of MIIs will be obligated to frame code of conduct and put in place an institutional mechanism. Further, the board of directors needs to ensure compliance by MD /CEO in this regard.

In a circular, Sebi said that code of conduct and institutional mechanism for prevention of fraud or market abuse will be applicable to market infrastructure institutions (MIIs) — exchanges, clearing corporations and depositories–on lines of insider trading norms. Now, MIIs will have to formulate a code of conduct to regulate, monitor and report trading by their designated persons and immediate relative of designated persons towards achieving compliance with the PIT (Prohibition of Insider Trading) Regulations.

Gold prices fall to 9-month low as rising bond yields, dollar hammer appeal

Gold slid as much as 2% to its lowest in nearly nine months on Wednesday as elevated U.S. Treasury yields and a stronger dollar hammered the metal’s appeal. Spot gold was down 1.2% at $1,718.09 per ounce by 11:56 a.m. ET (1656 GMT), after falling to its lowest since June 2020 at $1,701.40 earlier in the session. U.S. gold futures lost 0.9% to $1,718.80. “As real rates continue to rise, that’s challenging gold. The rates markets are also adding pressure on valuations for all asset classes, and as a result, gold is a casualty,” said TD Securities commodity strategist Daniel Ghali. Benchmark U.S. 10-year Treasury yields crept back towards a one-year peak reached last week, while the dollar rose.

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