“After last week’s shock, policymakers across the globe are easing everyone’s nerves. And there is no extra data at the moment to support inflation argument,” said Andrew Holland, CEO, Avendus Capital Alternate Strategies.
Surging bond yields had rattled the equity markets
last week with the Sensex and the Nifty
crashing 4 per cent on Friday. Investors were worried that the economic recovery and comfortable monetary conditions would fuel inflation, forcing central bankers to reconsider the easy monetary policy.
On Wednesday, the 10-year US Treasury note traded at around 1.45 per cent after briefly slipping below 1.40 per cent. Last week, the yield had surged to as much as 1.61 per cent, triggering a flight to safety among investors.
However, foreign portfolio investors’ (FPIs’) appetite for risk has made a strong comeback. On Wednesday, they pumped in more than Rs 2,000 crore for a second straight day.
Experts said the $1.9-trillion stimulus package approved by the House of Representatives in the US and the promise of more relief measures by other nations have boosted confidence in an economic revival.
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