For several months appears to nothing could to dissuade investors they repeatedly sent stocks to record levels. But as they fears spread that interest rates could eventually start raising and conflict were stepped up in Ukraine, Iraq and Gaza, signs have sprung as investors may eventually get anxious.
Such signals could be found in the equity and bond markets this week. Stock prices have gyrated while a measure having market volatility remained high and investors fled the junk–bond risk. In the meantime, demand for low risk government bonds have rocketed.
BSE Sensex and the Nifty fell more than 1% on Friday, marking their third consecutive session of declines. The broader Nifty also closed below its 50-day moving average for the first time since 21 February, sparking worries of a further sell-off. Sensex lost 1.02%, or 259.87 points, to end at 25,329.14, also falling 0.6% to mark its second straight weekly fall.
Global shares tumbled on Friday on rising worries of another drawn-out conflict in the region. Standard & Poor’s 500 has fallen 2.8 percent since it last reached a record high on July 24, and the Dow is now 3.4 percent below its last record close on July 16.
100McxTips Commodity Analysts said surely these movements were hooked to the growing geopolitical turmoil, which reached a crescendo Thursday night when President Obama announced that he had authorized airstrikes against militants in Iraq.
In a measure that could watch the money is moving out from emerging markets and back to safe havens assets, US warplanes on Friday hit targets in Iraq after the decision of President Barack Obama to authorize airstrikes on militants fighting the government of that country. Seizures that investors take risk away from the table saw in emerging markets of the United States Treasury, while the European stock markets gathering Asian stocks skidded and came to a seven-week low. The USA 10-year yield fell 2 basis points to 2.39% and touched 2.35%, the lowest since June 2013.
WTI Crude for September delivery rose 31 cents to $97.65 a barrel on NYMEX Exchange in volume that was 4.1 percent above the 100-day average. Brent crude oil was trading 1% higher at $106 a barrel in the futures market while the yen advanced against all but two of its 16 major peers.
Gold prices again crossed the Rs 29,000 mark to hit over two-month high by rising Rs 300 to Rs 29,100 per 10 gm in Delhi on Friday, mostly in tandem with a firming trend overseas as worsening tensions in Iraq fuelled safe-haven demand.
Experts say that markets may well look beyond sales. “Whilst markets fell on Friday, the sale was not heavy. Before anyone recovery takes place, we could see been a strong correction on the markets and would remain wary of buying this autumn. For the week, FIIs investors have bought $ 431 million worth of shares, taking his tally for the year to date to $ 12.10 billion. Over 1.8 billion has been wiped off the value of shares worldwide in the past two weeks.