Stories
2.6 Trillion Rupee Wipeout: Bond Yields Now a Bigger Fear Than Crude for Dalal Street
- •Indian stock market sees 2.6 trillion rupees wiped out as Sensex and Nifty fall significantly over eight weeks.
- •Continuous decline surpasses downturns during Covid and the 2008 Global Financial Crisis in terms of consecutive falling weeks.
- •Rising US bond yields, not just crude prices, are increasing investor concerns, making new loans expensive and impacting stock valuations.
- •Foreign investors' selling, a strong dollar, and tight global money supply are adding pressure to the market.
- •Investors advised to evaluate companies with low debt, strong businesses, and clear earnings, and invest in phases.
Key Questions Answered
Despite cheaper oil, the market faced intense pressure due to surging US bond yields, heavy foreign investor selling, a strong dollar, and tight money conditions globally, which collectively suppressed stock valuations and investor sentiment.
Rising yields make corporate debt and loans for business expansion more expensive, putting corporate profits under pressure. Additionally, higher returns on safe government assets prompt investors to demand lower share prices or hesitate to pay high valuations.
Experts advise investors not to rush into buying purely because prices are falling. Instead, they recommend carefully evaluating companies with low debt, strong underlying businesses, clear earnings, and reasonable valuations, and investing capital in phased manner.
