Sensex and Nifty Decline for Third Consecutive Session Amid Rising Bond Yields & West Asia Tensions

The Sensex and Nifty indices in India continued their downward trend for the third consecutive session on April 16, 2024. The ongoing Israel-Iran crisis and escalating tensions in West Asia have contributed to a cautious market sentiment globally, impacting equities. Additionally, the surge in US treasury bond yields, reaching a five-month high, has further dampened investor confidence.

At the close of trading, the Sensex was down by 456.10 points or 0.62 percent at 72,943.68, while the Nifty 50 fell by 124.60 points or 0.56 percent at 22,147.90. The market breadth remained negative, with about 2,037 stocks declining, 1,255 advancing, and 86 remaining unchanged.

Analysts are advising investors to remain cautious and adopt a wait-and-watch approach to see how the developments unfold. They anticipate a further decline in the indices towards the next key support level of 21,900, followed by a period of consolidation amid stock-specific movements. Resistance for the Nifty 50 is expected at 22,800.

The rise in bond yields may prevent the US Federal Reserve from considering rate cuts this year, according to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“The Israel-Iran crisis has impacted investor sentiment, reducing risk appetite. Investors are closely watching the domestic results for the March quarter,” noted Mandar Bhojane, Research Analyst at Choice Broking.

Despite the overall decline, the broader market fared relatively better, with the BSE Smallcap gaining 0.6 percent and BSE Midcap closing flat.

Among sectoral indices, Nifty IT and Nifty Financial Services were the worst-performing, with Nifty IT falling by 2.6 percent and Nifty PSU Bank shedding 1.3 percent. On the positive side, Nifty Pharma and Nifty FMCG ended 0.4 percent higher, emerging as the top gainers among sectoral indices.

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