Market mayhem: India earnings yields now trading higher than US bonds

A sharp rise in yield spread is a bullish signal for Indian equity but it has been overshadowed by the negative cues in the global markets, said analysts

Following the recent correction, the Indian equity market is now trading at a discount compared to the yield on the benchmark US 10-year government bond. The benchmark S&P BSE Sensex is currently trading at an earnings yield of 4.3 per cent, nearly 58 basis points higher than the yield on the US 10-year Treasury bond, which has dropped to 3.72 per cent, its lowest in 15 months.

For nearly a year beginning September last year, the Sensex earnings yield was lower than the US benchmark bond yield. The yield spread was minus 0.31 per cent at the