Global financial markets are coming under renewed pressure as crude oil prices surge past $107 a barrel and bond yields climb sharply on expectations of higher interest rates. The sell-off in government bonds is raising concerns that volatility could spread to currency and equity markets.
Markets are increasingly pricing in a US Federal Reserve rate hike next week. A further rise in crude prices could push retail inflation higher, leaving the Fed with less room to ease monetary policy.
GIFT Nifty closed at 23,329.50 in Thursday's derivatives trading in GIFT City. It rose to 23,362 in early trade today before retreating, signalling a weak opening for Indian equities.
Government bond prices are falling as investors expect fiscal deficits and borrowing to rise, pushing up interest rates.
US 30-year Treasury yields rose to 5.37 percent, taking bond prices to their lowest level since 2001
The yield on 10-year Treasuries climbed as high as 6.971 percent, the highest since 2023
Bond markets in Europe and Japan are also witnessing sharp volatility
Higher bond yields mean higher borrowing costs for governments and companies
The US Treasury's announcement that it would buy back $6 billion of bonds has failed to calm the market.
The US fiscal deficit is expected to widen sharply because of higher war-related and other government spending. Financing the deficit through additional bond sales could force the government to offer higher yields. Companies may also have to pay more to raise funds through bonds.
Higher borrowing costs could derail business investment plans and put pressure on the economy.
The impact could also reach consumers. More expensive housing, vehicle and personal loans could force households to cut spending, slowing economic growth.
US equities declined for a fourth consecutive session as higher crude prices and escalating tensions involving the US and Iran, the Houthis and Yemen, and Russia and Ukraine weighed on sentiment.
Markets are now awaiting the latest US retail inflation data, which could influence expectations about the Fed's next move. August retail inflation is expected at 3.4 percent, while core inflation, excluding food and energy, is forecast at 2.4 percent.
Thursday's close:
Dow Jones: 52,064.10, down 316.56 points or 0.60 percent
S&P 500: 7,591.70, down 44.66 points or 0.58 percent
Nasdaq Composite: 26,081.73, down 171.62 points or 0.65 percent
US stock futures were mixed this morning.
Dow Jones futures were up 125 points or 0.24 percent
S&P 500 futures gained 12 points or 0.15 percent
Nasdaq futures slipped 10 points or 0.04 percent
Indian stocks listed through American Depositary Receipts (ADRs) in New York ended mixed.
HDFC Bank, which fell 1.09 percent during regular trading, recovered 0.27 percent in extended trading to close at $21.90 (about ₹2,092).
ICICI Bank fell 0.59 percent during regular trading and ended unchanged in extended trading at $28.85 (about ₹2,753).
Infosys slipped 0.18 percent in regular trading before gaining 1.01 percent in extended trading to $11.02 (about ₹1,052).
Wipro fell 0.60 percent during regular trading and gained a similar percentage in extended trading to close at $1.68 (about ₹160).
European equities also declined on Thursday. The European Central Bank raised its interest rate by 25 basis points, in line with market expectations.
Asian markets remained under heavy pressure this morning.
Japan's Nikkei: down 2.85 percent
Australia: down about 1 percent
South Korea's Kospi: down 3 percent at the open
Hong Kong's Hang Seng: down 1.40 percent
Taiwan index: down 1.80 percent
Shanghai Composite: down 1.60 percent
Indian equities remained volatile throughout Thursday but managed to finish higher after the closing auction session.
At the end of regular cash-market trading, the Sensex was down 134.73 points, the Nifty 42.25 points and the Bank Nifty 33.05 points. The closing auction session helped all three indices move into positive territory.
The market opened slightly higher as crude prices eased marginally in the morning, but volatility returned later. Banking, financial services and media stocks gained.
Foreign investors continued to sell. They were net sellers of ₹438.24 crore in the cash market, while domestic funds were net buyers of ₹1,025.85 crore.
Thursday's close:
Sensex: 74,902.59, up 138.37 points or 0.19 percent
Nifty 50: 23,477.80, up 46.30 points or 0.26 percent
Bank Nifty: 56,471.95, up 176.40 points or 0.31 percent
Midcap 100: 62,357.35, down 235.45 points or 0.38 percent
Smallcap 100: 20,021.95, down 14.95 points or 0.07 percent
Market breadth remained weak. On the BSE, 1,826 stocks advanced while 2,502 declined. On the NSE, 1,452 stocks gained and 2,065 fell.
The National Stock Exchange (NSE) has fixed a price band of ₹1,700–₹1,785 for its IPO. The shares have a face value of ₹1 and the lot size is eight shares.
The issue will open on September 17 and close on September 21.
At the upper end of the price band, NSE's market capitalisation would be about ₹4.41 lakh crore. The IPO is expected to raise ₹22,562 crore.
Retail investors have been allocated 35 percent of the offer. The IPO comprises only an offer for sale, with no fresh issue of shares.
An SBI-led consortium of banks has agreed to provide a ₹35,000 crore loan facility to Vodafone Idea. The proposal will now require approval from the respective bank boards.
The funding comes after the government agreed to restructure Vodafone Idea's dues and the Aditya Birla Group committed additional capital.
Canara Bank plans to raise ₹4,500 crore through Tier-1 bonds to strengthen its capital base.
HDFC Bank has received favourable verdicts in all cases relating to its bond sales that were pending in Bahrain.
Gold prices continued to face pressure from interest-rate concerns. After falling nearly 2 percent on Thursday, gold recovered sharply this morning.
Gold closed Thursday at $4,317.70 an ounce, down $85.10 or 1.93 percent. It recovered to $4,335 in early trade today before easing slightly.
In Keralam, 22-carat gold rose ₹880 per sovereign on Thursday to ₹1,14,040.
Silver fell 5 percent on Thursday to close at $63.70 an ounce and recovered marginally this morning.
Other precious metals:
Platinum: $1,779
Palladium: $1,266
Rhodium: $9,350
Natural rubber prices moved higher in both international markets and Keralam.
In Bangkok, RSS 1 rose to $286.20 per quintal and RSS 3 to $282.70. In Keralam, the price climbed to ₹27,400 per quintal.
The Association of Natural Rubber Producing Countries expects global natural rubber production at 15.28 million tonnes this year against consumption of 15.36 million tonnes, pointing to a potential supply deficit.
Industrial metals fell on Thursday amid interest-rate concerns after strong gains in recent sessions.
Copper and zinc declined by nearly 2 percent. Reports said the US administration had dropped plans to impose an additional tariff on copper.
Copper fell 1.92 percent to $14,388.85 a tonne. Aluminium declined 0.88 percent to $3,317. Lead, nickel, zinc and tin also fell.
Cocoa fell 0.17 percent to $5,941 a tonne.
Prices have been under pressure after Ivory Coast's exports rose 19 percent last month and inventories at the ICE exchange climbed to a two-year high.
However, supply concerns remain. Ivory Coast's cocoa production is expected to fall 20 percent and Ghana's by 38 percent in the 2026-27 season. Ghana's cocoa marketing company has doubled its estimate of the expected production decline in the country.
Arabica coffee fell to $2.88 a pound as Brazil heads for record production. Brazilian exports rose 45 percent in August.
Palm oil declined 1.63 percent to 4,885 Malaysian ringgit a tonne.
The US dollar index rose to 99.05 on Thursday and climbed further to 99.10 this morning.
The euro weakened to $1.1617 and the pound to $1.3514. The Japanese yen stood at 154.26 to the dollar, while the Chinese yuan remained at 6.71 to the dollar.
The yield on US 10-year Treasury bonds rose again to 4.963 percent.
The rupee fell sharply on Thursday as rising crude prices increased pressure on the Indian currency.
The dollar rose 33 paise to close at ₹95.44.
In the overseas forward market, the dollar climbed to ₹95.69 this morning before easing to ₹95.49.
The Chinese yuan rose to ₹14.23 and the euro to ₹110.87.
Tightening supply is pushing crude oil prices towards the $110-a-barrel mark. Brent crude surged 6.5 percent on Thursday to close at $107.63 a barrel. It rose further to $108.06 this morning.
WTI crude stood at $102.49.
The sharp rise in crude is emerging as the biggest immediate threat to inflation, interest rates and the rupee.
Cryptocurrencies also came under renewed selling pressure. Bitcoin fell below $76,900. Ether slipped below $2,460 and Solana below $99.50.
(September 10, Thursday)
Sensex — 74,902.59 | +0.19%
Nifty 50 — 23,477.80 | +0.26%
Bank Nifty — 56,471.95 | +0.31%
Midcap 100 — 62,357.35 | -0.38%
Smallcap 100 — 20,021.95 | -0.07%
Dow Jones — 52,064.10 | -0.60%
S&P 500 — 7,591.70 | -0.58%
Nasdaq — 26,081.73 | -0.65%
US dollar — ₹95.44 | +₹0.33
Gold (ounce) — $4,317.70 | -$85.10
Gold (22K, Keralam) — ₹1,14,040 | +₹880
Brent crude — $107.63 | +6.42%
