India’s benchmark indexes fell on Monday, led by bank stocks, as elevated U.S. Treasury yields and the prospect of fewer U.S. rate cuts continued to weigh on emerging markets.
The Nifty 50 fell 0.71% to close at 23,644.9, while the BSE Sensex lost 0.57% to settle at 78,248.13. They swung between gains of 0.4% and losses of 0.8% before settling near the day’s low.
Ten of the 13 major sectors fell. High weightage financials lost about 1%, snapping a two-session gaining streak.
HDFC Bank and oil-to-telecom conglomerate Reliance Industries, the heaviest weighted stocks in the benchmark indexes, lost about 1% each, on the day.
The smallcap index shed 0.6%, while the midcap index added 0.4%.
The Federal Reserve has projected a slower pace of rate cuts in 2025, which has boosted U.S. Treasury yields. These two factors have lowered the appeal of emerging market assets.
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The high yields have intensified foreign outflows, while worries over elevated valuations and diminishing expectations of U.S. rate cuts in 2025 are also weighing on sentiment, said Saurabh Jain, assistant vice president of retail equities research at SMC Global Securities.
Besides Asia, even the U.S and European stock markets have felt the pressure of high Treasury yields.
Domestically, auto stocks shed 1.4% ahead of monthly sales data due later in the week.
Bucking the trend, JSW Energy rose 2.8% on a deal to buy renewable power company O2 Power Midco Holdings.
Adani Enterprises gained 7.6% after the company said its new airport in Navi Mumbai will be operational by May.
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