Sensex has sunk over 2,300 points in five sessions

1. Bond market revolt: The US 10-year Treasury bond yield surged to as high as 1.72 percent earlier today despite the dovish tone of the US Federal Reserve in what can be termed as a revolt by bond traders against the Fed’s policy stance. Money managers have suggested that a spike in US 10-year bond yields to 2 percent will unleash chaos in global financial markets that are anyways quoting rich valuations. In the Indian market also the 10-year government bond yields surged past the crucial psychological level of 6.2 percent.

2. The surging COVID-19 cases: The surging COVID-19 cases around the country have sparked fears of a second wave of the pandemic hitting India in the coming weeks that may hamper the recovery of the economy from its first-ever technical recession in several decades. Comments by politicians about localised lockdown will hurt mobility and may force investors to downgrade their earnings and growth expectations in the coming days.

3. Vaccine frustration: Reports that a significant amount of COVID-19 vaccinations in India may be wasted due to lower off-take and a slower-than-expected rollout by the government has also sparked concerns that the country may not be able to achieve herd immunity as soon as expected earlier.

4. Margins concerns: The surging commodity prices across the world as captured in the Wholesale Price Inflation in February has resulted in analysts cautioning investors that operating margins of companies may come under pressure as moderate demand conditions inhibit price increases in several sectors. Surging product prices at a time when demand is yet to fully recover from the COVID-19 shock will undermine corporate profits going ahead, said analysts.