Recently investors sold off stocks across the board leading to fall in the stock market indices.
What led to the sell-off in Indian market?
Earlier, US 10-year bond yield climbed to 1.614% which was highest in a year due to concerns over inflation in the country.
Due to this US Federal Reserve had to either lower the monthly bond-buying or to hike the interest rates.
This affected the India markets as it is the major recipient of foreign inflows.
The rising crude oil prices and increasing geopolitical tension between US and Syria also raised concerns among the investors.
Moreover GDP data for the 3rd quarter which is yet to be released is also adding volatility to Indian market.
How do Indian markets further respond?
Investors will keenly monitor the data like auto sales numbers and manufacturing PMI and services PMI.
But the rising bond yields continue to remain a key concern for equity markets worldwide despite positive statements by US Fed.
It is expected that there will be further decline in the indices.
Is the bull market over?
Though markets are witnessing volatile movements they are not expected to fall further.
Indian markets have witnessed a positive performance in the earlier months due to strong foreign flows, improvement in the macroeconomic fundamentals and corporate earnings growth.
Therefore conditions for a structural bull market remain intact in India.
Hence long-term investors will use this opportunity to take advantage of volatility and accumulate quality businesses at reasonable valuations and price points.
The market will gain momentum when global market gets stabilised.
This will be achieved by maintaining accommodative monetary policy and a positive growth.
