Sensex Drops 400 Points As Bond Yields In The US Spike

Benchmark indices fell in trade today with the Sensex dropping 410 points as bond yields in the US rose sharply. The 10-year U.S. Treasury yield hit 1.54% on Tuesday morning, its highest point since June, amid concerns around persisting inflation. This is not good news for the equity markets as higher yields means investors would not move away from equity to debt, even as equities across the globe remain overvalued.

There are fears that rising inflation across the globe, would push interest rates higher around the globe. The Sensex ended the day lower by 410 points, while the Nifty dipped 106 points. Across the board was seen in the tech sector stocks like Tech Mahindra, HCL Tech and Infosys losing heavy ground. Banking and NBFC stocks too saw selling pressure with Bajaj Finance, ICICI Bank, HDFC Bank and HDFC among the top losers in trade.

Stocks that remained resilient to the fall were stocks like Tata Steel and Reliance, Coal India and NTPC remaining strong.

European stocks too fell to their lowest in a week on Tuesday as a surge in government bond yields saw high-growth technology shares dropping.

Meanwhile, crude oil prices gained by 1%, while gold was seen steady in the global markets.