US 10-Year Yields Surge to Five-Month High on Inflation Concerns, Indian Stock Market Expected to Open Lower on 26 Apr 2024

Date: April 26, 2024

US 10-year yields soared to over a five-month high following the release of data indicating a sharper-than-expected increase in inflation during the first quarter, coupled with a weaker-than-anticipated growth rate. The report, unveiled on April 25, underscores persistent inflationary pressures in the US economy amidst an uneven economic recovery.

According to the data, gross domestic product (GDP) expanded at a 1.6% annualized rate in the last quarter, falling short of economists' projections of a 2.4% upturn. Concurrently, benchmark 10-year Treasury note yields surged to 4.70%, marking their highest level since November 2.

The report also revealed a notable 3.7% uptick in core Personal Consumption Expenditure (PCE) prices, surpassing initial estimates. Core PCE, regarded as a key indicator of underlying inflation in the USA, points towards mounting inflationary pressures in the economy.

In the wake of these developments, the Indian stock market is bracing for an impact on April 26, 2024. Anticipating a turbulent opening, Nifty and Bank Nifty indices are poised to witness a gap down as Dow Jones in the USA concluded nearly 1% lower, shedding 375 points.

Market analysts predict that the heightened concerns surrounding inflation in the US, coupled with subdued economic growth figures, are likely to reverberate across global financial markets. The Indian stock market is expected to bear the brunt of this sentiment, with investors bracing for increased volatility and downward pressure on equities.

While the exact magnitude of the gap down in the Indian stock market remains uncertain, market participants are advised to exercise caution and closely monitor developments in both domestic and international markets. The prevailing economic landscape underscores the importance of prudent risk management and strategic decision-making amid evolving market conditions.