Markets dip on global economic concerns

Following global cues, Indian benchmark indices tanked in the early morning session on Monday. As indicated in our market opening article this morning, BSE Sensex and Nifty tracked the global indices to dip more than 360 points and 104 points, respectively.

At 9:41 hours, the BSE Sensex fell by 369 points or 0.97 per cent to 37,795.41, while Nifty50 dipped by 104.10 points or 0.91 per cent to 11,352.80 on Monday. Among the top contributors to this downtrend were index heavyweights, Reliance, ICICI, HDFC, ITC, Kotak Bank and L&T. 

Sectorally, all major indices including Nifty Bank, Metal, Realty were trailing down by nearly 1 per cent. Nifty Bank was quoting 29,239.95, down by 342.55 points or 1.16 per cent. Besides Nifty Auto and IT were both down by 0.73 per cent and Nifty FMCG was down 0.79 per cent.

What has fuelled the meltdown in the global indices, is the data that showed that the yields on benchmark US 10-year treasury notes dipped below three-month rates in Asia on Monday. The US bonds yield curve inverted for the first time since 2007, on Friday. An inverted yield curve signals the risk of economic recession.

Also, the US Federal Reserve is expected to end its monetary tightening policy and the interest rate hikes are not likely until the second half of next year.

Japan-based Nikkei was down by 3.12 per cent, Shanghai Composite was down by 1.37 per cent and Kospi was down 1.68 per cent on Monday morning.