Indian equities extended their losses on Tuesday, with the Nifty 50 and Sensex falling as rising US Treasury yields and higher crude oil prices weighed on sentiment.
The Nifty 50 fell 186 points, or 0.82%, to 22,605.60, while the Sensex dropped 693 points, or 0.94%, to 72,087.62, as of 9:39 am.
Barring Pharma, all sectoral indices are in the red, with Media and Financial Services leading the losses. Nifty Bank is trading below its 3 month low.
Here are three reasons why market is crashing:
Global Market Cues
The Dow Jones Industrial Average had declined 347.11 points, or 0.67%, to 51,481.51, while the S&P 500 shed 59.72 points, or 0.77%, to 7,683.69. The Nasdaq Composite closed 248.34 points, or 0.92%, lower at 26,820.38.
Asian markets traded lower on Tuesday, following overnight losses on Wall Street. Japan's Nikkei 225 fell 0.79%, while the Topix declined 1.55%. South Korea's Kospi dropped 0.41%, and the Kosdaq slipped 1.03%. Hong Kong's Hang Seng index futures indicated a higher opening.
Oil On The Boil
Oil prices extended gains for a second session, with Brent crude holding above $106 a barrel and West Texas Intermediate approaching $94, as uncertainty around US-Iran negotiations outweighed the partial restoration of flows through Saudi Arabia's key East-West pipeline. The market is weighing two competing forces: the prospect of more supply returning through Saudi Arabia and the continued uncertainty around the Strait of Hormuz.
Treasury Yields
US Treasury yields continued their rally on interest rate hike concerns. The benchmark 10-year Treasury note yield ended above 5.2%, near levels not seen since 2007. The 30-year topped 5.56%, trading around a 2004 high.
Broader Market
The broader market is also trading under pressure, with Nifty Midcap 150 extending its decline, down around 1%, which is below its 3-month low.
Nifty Smallcap 250 is also continuing its decline to the second day, with Ather Energy and CAMS as the key drags.
The Outlier
Nifty Pharam is the only sector in green, with gains of 0.28%.
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