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The combined market valuation of all the top-10 most valued firms plunged Rs 4,95,061 crore last week, in line with a bearish trend in equities, where Tata Consultancy Services and Reliance Industries faced the sharpest erosion. Last week, the BSE benchmark tanked 4,091.53 points or 4.98 per cent. "The Indian equity market recorded its steepest weekly decline since June 2022, with the Nifty losing 4.77 per cent. The week began with the US Federal Reserve's announcement, which significantly altered market sentiment. "Led by Chair Jerome Powell, the Federal Reserve revised its outlook to only two rate cuts in 2025 instead of the previously anticipated four. This shift in policy dampened market confidence," Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, said. The market capitalisation (mcap) of Tata Consultancy Services (TCS) slumped Rs 1,10,550.66 crore to Rs 15,08,036.97 crore. The valuation of Reliance Industries tumbled Rs 91,140.53 crore to Rs 16,32,004.17 crore. HDFC Bank's market valuation eroded by Rs 76,448.71 crore to Rs 13,54,709.35 crore and that of Bharti Airtel tanked Rs 59,055.42 crore to Rs 8,98,786.98 crore. The mcap of State Bank of India plunged Rs 43,909.13 crore to Rs 7,25,125.38 crore and that of ICICI Bank diminished by Rs 41,857.33 crore to Rs 9,07,449.04 crore. The valuation of Infosys plummeted Rs 32,300.2 crore to Rs 7,98,086.90 crore and that of Life Insurance Corporation of India (LIC) fell by Rs 20,050.25 crore to Rs 5,69,819.04 crore. Hindustan Unilever's mcap declined by Rs 12,805.27 crore to Rs 5,48,617.81 crore and that of ITC went lower by Rs 6,943.5 crore to Rs 5,81,252.32 crore. In the ranking of the top-10 firms, Reliance Industries retained the most valued firm title followed by TCS, HDFC Bank, ICICI Bank, Bharti Airtel, Infosys, State Bank of India, ITC, LIC and Hindustan Unilever.

Recently the US Federal Reserve cut the interest rates by 25 basis points from 4.75% to 4.5%. This move had served as a key trigger for the market decline of 2.85% in S&P 500. Such a sharp fall in the index sent chills down investors’ spine. Most are wondering whether there is more pain in the offing. Unfortunately, the answer is yes. Let’s see why I am saying this.Whenever there are instances of rise in inflation, the Federal Reserve hikes interest rates to combat it. This increase in rates primarily affects short-term rates which is reflected in the higher 3 month bond yields. Such a prolonged continuation of rate hike sometimes pushes the long term US 10-year government bonds yields lower. The long term yields are market dependent and Fed has limited control over it. This phenomenon of higher short-term and lower long-term yields leads to yield curve inversion. This is basically the market's way of saying that a slowdown in the economy is required to control the rising inflation. The probability of the economy to hit a recession increases when the yield curve remains inverted for a longer period of time. Historically, as shown in the chart below, every instance where the curve dipped below the zero/black line and then rose above it has been followed by a recession. 116558662Additionally, it typically takes a few months after the curve begins to un-invert and crosses the black line for a recession to occur.So, when does this un-inversion occur?As mentioned earlier, the Fed raises short-term borrowing costs to combat inflation, which slows economic growth. To counter this slowdown and stimulate the economy, central banks cut interest rates, reducing short-term bond yields. Meanwhile, long-term bond yields—shaped by growth, inflation expectations, and future rate projections—may stabilize or rise. This shift leads to the un-inversion of the yield curve.This shift in interest rates can lead to the “un-inversion” of the yield curve after a period of inversion. At this point, the likelihood of a recession increases once the curve crosses the black line, often impacting the S&P 500 in a similar pattern.Here’s the dataset of what happens to markets after yield curve un-inverts right from 1970: 116558645Since the 1970s, there have been 7 instances where markets experienced corrections over a 6-month period. The average gains of S&P500 is -4.8%. Notably, in the last 4 instances, 75% of the time, markets continued to decline for up to 1 year, and in 50% of those cases, the pace of the decline accelerated (2001 and 2007).The charts below illustrate market corrections following yield curve un-inversions. 116558632 116558616History often follows a familiar cycle: interest rates are initially raised, triggering a yield curve inversion. In response to slowing economic growth, rates are then lowered, leading to the start of a yield curve un-inversion. This is likely to set a stage for a potential recession and market correction.As the saying goes, “When America sneezes, the world catches a cold.” The effects of these shifts are also felt in Indian markets. In light of this, investors should approach new investments with caution and consider rebalancing their portfolios. By staying informed and proactive, investors can navigate these changes and position themselves for long-term success.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

In less than a week, the Hockey India League (HIL) will make a return after a gap of seven years. With the sport on a strong footing, the league, in its new avatar, has the potential to do for Indian hockey what the IPL has done for Indian cricket -- serve as the supply line for the national team and help strengthen the foundations of the sport in the country. Alongside reviving the eight-team men’s league, Hockey India (HI) has also launched a four-team women’s league.“When I was elected as president, one of the main objectives was to revive the HIL that had substantially helped the Indian players improve their performance. Rubbing shoulders against some of the best players in the world also changed their mentality of playing some of the top teams in international hockey,” said Dilip Tirkey, president of Hockey India (HI).“We are looking forward to a successful edition as it will have a profound impact not just on Indian hockey but also on world hockey,” he added. What might work for the league is the choice of venues. Both the men’s and the inaugural women’s league will be held entirely in just two locations – Rourkela in Odisha and Ranchi in Jharkhand. In recent years, these two cities have emerged as hockey hotbeds, regularly hosting matches in packed stadiums. By keeping the tournament in two venues will not only create an electric atmosphere but also help organisers save logistical expenses.“A lot of positive steps have been taken to ensure the success of the leagues. It will have a far-reaching impact on Indian hockey and also aid global hockey. The leagues will attract youngsters to take up the sport and help us unearth fresh talent keeping the 2028 Olympics in mind,” said Bhola Nath Singh, secretary general of HI.116546464Many current Indian players, including captain Harmanpreet Singh, benefitted from the erstwhile version of the league that ran from 2013 to 2017.“I benefited tremendously from the exposure I got as an upcoming player in the HIL. Our mindset changed after getting a chance to play alongside the world’s top players during the HIL. We were getting exposed to innovative strategies, different styles of play and there was knowledge sharing with stalwarts of the game. Now that the league is being revived, I believe it will have a similar impact on the youngsters coming up the ranks,” said Harmanpreet, who got the highest bid of Rs 78 lakh in the auction.The league will also provide former players with a platform to stay connected to the sport. Stars like PR Sreejesh, Deepak Thakur and Rani Rampal are involved in the league, allowing them to give back to the sport even after retirement. The Hockey India starting both the men’s and women’s editions together is also a significant step. Indian women’s hockey is on an upward curve post the Asian Champions Trophy win and the league is expected to help sustain the momentum.“I am excited that Hockey India is starting a women’s HIL. We had been waiting for this moment for a long time. We have seen how much the men’s side has benefitted from this league in the past and I believe starting the women’s HIL can be a game changer and it will have a positive impact on women’s hockey, particularly building up towards the Asian Games in 2026 and the LA Olympics in 2028,” said former India captain Savita Punia, who will turn up for the Soorma Hockey Club. With back-to-back Olympic medals, Indian hockey has captured fan imagination in 2024. The sport is being talked about and watched. Players like Harmanpreet and Sreejesh are brands in themselves and all of this makes the timing of the league just right.“It is a time when you want to invest in hockey. People are following the sport keenly and the league will further add to the positive momentum the sport now has. We are all in this to make sure India mounts a strong challenge in LA 28,” said Rahul Todi, owner of the Shrachi Rarh Bengal Tigers.The HIL can learn an important lesson from the IPL’s success: it’s all about the quality of the product, that is sport. If the HIL succeeds in producing high-quality hockey, there is no reason the league won’t make a lasting impact in the years to come.