Recent developments in the global equity and bond markets hint at a significant downside risk to the equity market. The US' equity benchmark Dow 10 yrs Industrial Average is close to giving up all its post-Covid gains and the financial incentive for foreign investors to own Indian equity assets is at the lowest since the 2008 global financial crisis.
The US equity benchmark closed on Friday at 29,592.85, just 41.43 points higher than its pre-Covid closing high of 29,551.42 made on February 12, 2020.
The Dow Jones is now down 19.6 per cent from its record high closing of 36,799.65, made on January 4 this year.
Analysts attribute this to a sharp rise in yields or interest on risk-free US government bonds; it has greatly reduced the financial incentive for investors to put money in riskier assets, such as equity.
This story is from the September 26, 2022 edition of Business Standard.
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This story is from the September 26, 2022 edition of Business Standard.
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