Stocks plunge on US bond yields surge, escalating Israel conflict

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Key Points

MUMBAI : Indian stocks plunged on concerns over the impact of rising US bond yields, the widening Israel-Hamas conflict, and the pressure on profitability posed by potentially higher crude oil prices..

The Nifty and Sensex fell by more than a percent each, breaching key supports, while the Nifty Midcap 150 and the Nifty Smallcap 250 indices slumped 2.7% and 3.79% each..

The fall was due to direct retail investor selling, which led to overall investor wealth falling by 7.47 trillion from Fridays total market capitalization to 308.99 trillion on Monday. . The decline happened despite foreign portfolio investors (FPIs) purchasing a provisional 252.25 crore and domestic institutional investors buying 1,111.84 crore worth of shares..

The rising yield in the US has resulted in FPIs repatriating funds from Indian shares to the safety of the dollar, causing the Indian markets to correct significantly from record highs just a month ago..

Mid caps and small caps are expensive, and any macro development like rising bond yields in the US could make the markets nervous," said Gautam Duggad, head of research-institutional equities at Motilal Oswal Financial Services..

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