Indian markets have opened Monday's trade on a negative note and are in deep red. Both benchmark indices -- Sensex and Nifty -- have crashed over 5% in the early morning trade.
DH spoke to three analysts on why markets are tanking. Here are the reasons:
Global cues: The global equity markets on Friday traded in red after concerns over the reopening of the US economy. US President Donald Trump’s threats to reignite the US-China trade war over coronavirus added fuel to the fire. On Monday as well, far eastern markets opened on a negative note with Nikkei 225 down 2.84%. Weighed by the foreign fund sell-off Indian equities tanked on Monday.
Profit booking: On Thursday, the previous trading session for the Indian markets, there was a high level of short-covering in the domestic equities. It is the buying in of stocks or other securities or commodities that have been sold short, typically to avoid loss when prices move upwards. That caused Sensex to jump by 997.46 points. So, today, there would be a lot of profit booking as well.
Muted earning: The previous quarter -- earnings season for which is still going on -- has been marred with muted and decline in the corporate earnings. In the present quarter, there are hardly any earnings. So that reality seems to have sunk in as well, analysts on street say.
Meanwhile, the numbers suggest that the investors are moving their funds towards more secure government bonds, as yields on 10-years bonds tanked to 6.082% in early morning trade.