On Friday 26th February 2021, the market was bears’playground with the bulls having nowhere to hide.
As the international markets were bleeding in red, theIndian capital markets were not left untouched by the global sentiments.
Nifty 50 is down by 450 points, a fall of about 3% from thelast trading day’s close. The same goes for Sensex which too is down about thesame percentage.
Most of the experts of the stock market opine that themarkets are expected to enter a consolidation phase. In other words, the pricesof stocks will remain in a range and neither go very high or very lowrelatively.
There appears to be a consensus that today’s action so farhas been due to the following reasons:
Bond yields rise
American Treasury yields were at their 52-week high. The sameis being explained due to expectations of a strong economic expansion and the attendantinflation.
Similar to the US bond yields, the national bond yield areat 6.18% yesterday.
American air strikes
Yesterday, the USA launched airstrikes in Syria targeting facilitiesnear the Iraqi border which were allegedly used by Iranian-backed militiagroups.
International markets
The chain of rise in the US bond yields leading to downwardpressure in tech stocks led to Asian stocks declining.
The story was similar in Australian, Japanese, and Hong Kongmarkets.
Crude oil price rise
Even though the crude oil was down slightly, still on amonth-to-month basis, both Brent and WTI crude oil are up in the range of 20%.
GDP (Gross Domestic Product) data of Quarter 3
The GDP data release in expected in the latter half of the day,and investors are cautious as a result. The market would be looking forward toseeing whether the recession continued or, as some as believe, the economy hasgrown.
One group is estimating a contraction of about 2% while theother group is seeing a growth of 1.8%.
Anyways, all in all, investors are seeing either losses or amassive reduction in their paper profits, while informed traders are seeinghuge profits betting against the market (which is technically called shorting).