On Wednesday, the benchmark indices fell significantly even as Moody’s upgraded India’s credit rating from unstable to negative. Rising bond yields and oil prices dampened investor confidence and fueled worries about the outlook for global growth.

While crude oil is trading around multi-year highs, US Treasury 10- and 30-year yields have risen to their highest level since June. Both are thought to be obstacles for emerging

the dropped by about 1%, or 555 points, to settle at 59,189 after climbing by nearly 2% in the previous two sessions. To finish at 17,646, the dropped 176 points. The India VIX index increased 5.7% to reach 17.33, indicating that traders anticipate greater volatility throughout the coming week.

A total of Rs 803 crore worth of shares were sold by foreign portfolio investors (FPIs) on Wednesday, pushing their two-day selling total above the Rs 2,000 crore threshold.

Investor concerns about inflation and the possibility of less Federal Reserve support are increased by the growth in. Global markets had recovered from pandemic lows thanks in part to the Federal Reserve’s bond-purchasing program and its zero interest rate policy.

Energy price increases have increased pressure on central banks to tighten monetary policy due to concerns that inflation will diminish corporate earnings and consumer expenditure. Brent crude’s price was $81.80 per barrel at 6:40 IST. It increased earlier in the day to $83.47, its highest level since October 2018.

The yield on US 10-year bonds is currently 1.55 percent, which is the highest price in almost four months.

The IMF has lowered its forecast for economic growth, and New Zealand’s central bank is the most recent to hike interest rates. On anxieties about China’s real estate market and on anticipation that major central banks will raise interest rates soon amid worries about escalating inflationary pressures, Asian equities have experienced significant foreign outflows.

Domestic indices were in the negative, erasing their early gains, as a result of weak global markets that caused profit-booking in metals and IT companies. The Indian market is being shaken by the rise in crude oil prices, while US bond yields are being impacted by inflation . The RBI has started its three-day MPC meeting, during which the monetary authority is anticipated to maintain rates at current levels. However, it is probably going to disclose plans to progressively drain the economy’s liquidity, according to Vinod Nair, head of research at Geojit Financial Services.

According to analysts, Moody’s outlook improvement indicates that there is a chance for long-term growth and eventual budgetary reduction.

With 1,892 stocks decreasing and 1,404 stocks advancing, the market breadth was negative. All but three of the stocks decreased. The largest decrease, 3.4%, was experienced by IndusInd Bank. The session closed with losses for each sectoral index. The most significant declines were seen in the metal and healthcare sectors, with respective gauges falling by 3% and 1.7%.

A lot of profit-taking is also suggested by the weak advance-decline ratio. Even if the global markets appear to be improving, following a modest improvement, profit-taking may resume. While traders can maintain strong stop losses and cut their positions until the sentiment recovers, investors can take a portion of their profits and raise cash, according to Deepak Jasani, head of retail research at HDFC Securities.

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