Explained: How bond yields impact stock market & what should investors do?

A rally in the stock market tends to raise bond yields as money moves from the relative safer investment bet to riskier equity stock markets

A gradual rise in bond yields globally has created a panic in the equity markets. Indian frontline benchmarks - the S&P BSE Sensex and the Nifty 50 - lost nearly 2 per cent in intra-day trade.

At the global level, US Treasury yields vaulted to their highest since the pandemic began on expectations of a strong economic expansion and related inflation. Back home, the 10-year government bond yield jumped to 6.18 per cent on Thursday, February 25.

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The benchmark bond (10-year tenor) yields had fallen to 5.6 per cent during the peak of the pandemic crisis but have since