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Moneycontrol Pro Market Outlook | Rising rates, falling stocks

India's stock market declined 2.38% last week, its worst performance in two months. IT companies, boosted by TCS results, helped mitigate losses, while mid and small-cap stocks dropped about 6%

January 13, 2025 / 09:56 IST
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Global markets, particularly the US, are gripped by a wave of anxiety as stubborn inflation persists and bond yields remain elevated. On Friday, US stocks plummeted after Treasury yields surged, triggered by unexpectedly strong job data that stoked fears of delayed interest rate cuts by the Federal Reserve. Analysts now predict that the Fed will maintain high interest rates for longer than traders had anticipated. This trend is not confined to the US; bond yields in the UK and Japan have also reached multi-year highs.

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In India, the stock market closed in the red for four of five trading days last week, suffering a 2.38% decline—the worst performance in two months. The downturn could have been more severe if not for a robust showing from IT companies following TCS's results. Mid and small-cap stocks were particularly hard hit, losing approximately 6% over the week.

Foreign Institutional Investors (FIIs) continued their exodus from Indian markets, offloading equities worth ₹16,854.25 crore during the week, which brings January's total FII outflow to ₹21,357.46 crore.