Investors feared foreign outflows as bond yields are inversely proportional to equity returns..(MINT_PRINT)
Investors feared foreign outflows as bond yields are inversely proportional to equity returns..(MINT_PRINT)

Sensex tanks 1,631 points to 49,407 in afternoon session; Nifty below 14,600

According to a Reuters poll, India's economy is likely to have returned to growth in the December quarter after contracting 7.5% in the July-September period.
By hindustantimes.com | Written by Kanishka Sarkar
UPDATED ON FEB 26, 2021 01:15 PM IST

Domestic equity markets continued to plunge in the afternoon session on Friday after opening in the red and came ahead of the December-quarter gross domestic product (GDP) data. While the 30-share BSE Sensex was down 1,631 points to trade at 49,407, the broader Nifty slipped nearly 500 points to 14,599.

Selling was across the board with financial stocks falling the most. Housing Development Finance Corp and HDFC Bank were the top two drags on the Nifty. Among stocks, ICICI Bank slipped by 4.9% to 597.10 per share while HDFC Bank was lower by 4.7% lower. The Axis Bank and IndusInd Bank were down by 4.4% each and Kotak Mahindra Bank by 4%, ANI reported. 

"There is nervousness due to rising yields. The overnight jump is a fresh wound and we are seeing a knee-jerk reaction," Rusmik Oza, head of fundamental research at Kotak Securities, told news agency Reuters. 

After the fall during the opening session, Binod Modi head-strategy at Reliance Securities told PTI, "Recent rise in bond yields globally and concerns with regard to higher commodity prices weighed on investors' sentiments as these two elements reduce the future value of cash flows and earnings." 

According to a Reuters poll, India's economy is likely to have returned to growth in the December quarter after contracting 7.5% in the July-September period.

In the previous session on Thursday, Sensex spurted 257.62 points or 0.51% to finish at 51,039.31, and Nifty climbed 115.35 points or 0.77% to 15,097.35.

The rupee also registered a massive fall of 67 paise and slipped below the 73 per US dollar mark in opening trade in line with weak Asian currencies and heavy selling in the domestic equities.

On the global front, US equities witnessed a steep fall as a sharp spike in bond yields dampened investors' sentiments and in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading with significant losses in mid-session deals.

Meanwhile, Brent crude futures, the global oil benchmark, fell 0.39% to $66.62%.

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