Statsguru: Analysing impact of rising US bond yields on Indian stock market

Foreign exchange reserves have declined by around $25 billion from the highest point in 2023

Yields on US 10-year government bonds touched 5 per cent last week, its highest level since 2007. The benchmark US 10-year treasury yield was up over 150 basis points from its 2023 low, though it came down later in the week. Meanwhile, Indian bond yields witnessed a rise of 40 basis points from their low, narrowing the gap between the two (chart 1).

 

Higher yields in developed markets, particularly the US, can put pressure on emerging market central banks to raise interest rates. Indonesia’s central bank raised interest rates in a surprise move earlier this month. The Philippines followed