Bond yield rise may put pressure on stock valuations, rally in markets

Analysts expect up to a 10% decline in the broader markets due to these changes in global macroeconomic conditions

A steady rise in bond yields in the United States and India is likely to put pressure on the stock valuations and the rally in the markets, which have witnessed a sharp rebound from the March 2020 lows.

Historically, there is a negative correlation between the 10-year government bond yields and equity valuations.

The 10-year bond yield in the US is up 44 basis points (bps) since the end of July, and 75 bps since the beginning of the current calendar year. The 10-year US government bond had a yield of 1.67 per cent on Friday, sharply higher than the