What's behind Sensex's 1,939-point crash today
Published On: Friday, February 26, 2021 | By: Team KnowMyStock
amid a global equity market rout. Benchmark indices tumbled over 4 percent in the intra-day trade with the S&P BSE Sensex sinking over 2,149 points while the Nifty50 tumbled over 629 points. The indices ended near the lowest point of the day, at 49,100 and 14,529 levels, respectively, down 1,939 points and 568 points or 3.8 percent. A rise in commodity prices has fanned inflation risks, pushing bond yields higher. That apart, reports that the United States launched airstrikes in Syria on Thursday, targeting facilities near the Iraqi border further dented global mood. Going forward, analysts expect the markets to consolidate after a sharp run since March in the backdrop of near-term headwinds. US Treasury yields vaulted to their highest in a year on expectations of a strong economic expansion and related inflation. Back home, the 10-year government bond yield jumped to 6.18 percent on Thursday, February 25.
The United States launched airstrikes in Syria on Thursday, targeting facilities near the Iraqi border used by Iranian-backed militia groups, CNN reported. The Pentagon said the strikes were retaliation for a rocket attack in Iraq earlier this month that killed one civilian contractor and wounded a US service member and other coalition troops.
Asian stocks opened sharply lower on Friday after Wall Street's main indexes tumbled, with technology-related stocks under pressure following a steep rise in benchmark US Treasury yields.
Despite the drop in prices on Friday, both Brent and WTI are on track for gains of about 20 per cent this month, as markets have grappled with supply disruptions in the United States, while optimism has built for demand to improve with vaccine rollouts.
Investors also turned cautious ahead of the release of the gross domestic product data, to be released later in the day. Market participants would track whether the economy continued to be in recession in the third quarter of FY21 or it ended with the second quarter only.
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