Dalal Street bulls continue to slip on global oil spill
oil prices further squeezed appetite for risk assets.
A surge in US treasury yields overnight to a 16-year high also kept investors on the edge, with market participants weighing the impact of elevated interest rates on equity valuations. BSE's Sensex dropped 610.37 points, or 0.92%, to close at 65,508.32.
NSE's Nifty fell 192.90 points, or 0.98%, to end at 19,523.55.
«Global sentiments have been dampened over a sharp rise in Brent crude price and 10-year bond yields in the US,» said Siddhartha Khemka, head, retail research, at Motilal Oswal Financial Services. «Also concerns over the likelihood of interest rates remaining higher for longer have been adding to the global overhang.»
Brent Crude was at $96.12 a barrel on Thursday — around the highest level in over a year — after US crude stocks fell, adding to concerns over tightness in the market.
Firm oil prices do not bode well for India, which imports more than 80% of the crude oil it requires. The recent surge in oil prices has been one of the main contributors to the recent drop in the stock market.
3.5% Down From All-Time Highs
Both Sensex and Nifty have fallen nearly 3.5% from their all-time highs.
The Nifty had hit its record high of 20,222.45 on September 15.
Analysts do not rule out the possibility of the index dropping to 19,100-19,200 levels in the near term if oil prices and US bond yields continue to remain firm. On Wednesday, yields on US bonds rose to 4.612% — the highest since 2007 — on worries that sticky inflation may force the US Federal Reserve to continue to keep interest rates higher for a longer period.
The benchmark 10-year notes were up at 4.641% on Thursday. «The global environment is turning extremely volatile with increasing headwinds
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