US bond yields effect on Indian markets | US Bonds explained | US Bond yield kya hota hai | NIFTY50
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Indian markets have been experiencing
Indian markets have been experiencing a roller coaster ride recently, with the benchmark NIFTY50 index trading near its 5-week low. One significant factor behind this decline is the surging US bond yield, which has reached a 16-year high, hovering around 4.7%. This has adversely affected equity markets globally
But what exactly is US bond yield, and how does it influence Indian markets? In this video, we'll break it down for you. Don't forget to like, share, and subscribe!
*Key Points Discussed in the Video:*
- Understanding US bond yield and its influence on Indian markets.
- The reasons behind the rise in US bond yields.
- How the rise in US bond yield affects foreign investment in Indian equities.
- Recent data on FIIs' activities in the Indian equity market.
- The NIFTY50's performance amidst this market scenario.
00:43: *What is Bond Yield?*
Bond yield, simply put, represents the return an investor receives for lending money to a borrower, often referred to as the interest rate. Bonds are a form of loans issued by governments, companies, and organisations to raise capital. The US bond market, the largest in the world, accounts for approximately 40% of global debt.
01:03: *Why is the US Bond Yield Rising?*
The US bond yield is on the rise due to the Federal Reserve's aggressive rate hikes since March 2022. Borrowing rates in the US are at a 22-year high, with more rate hikes expected to combat inflation, as per the latest statements from US Fed officials. Additionally, rising inflation, which reached 3.7% in August, prompts investors to demand higher bond yields to offset the eroding purchasing power. Consequently, the 10-year US treasury yield has surged to around 4.7% in October 2023 from 1.5% in January 2022.
01:52: *How Does US Bond Yield Impact Indian Equity Markets?*
Compared to equity investments, bonds are considered a safer option, offering risk-free returns. When US bond yields rise, US assets become more attractive to investors seeking higher returns. Consequently, foreign institutional investors (FIIs) withdraw capital from emerging markets like India and invest in US bonds, resulting in reduced foreign investment in Indian equities, putting downward pressure on stock prices. This trend is evident as FIIs have been net sellers in Indian equity markets over the last three months.
In August, FIIs witnessed a net outflow of ₹20,620 crore, which increased to ₹26,692 crore in September. In October, FIIs sold ₹6,458 crore worth of Indian equities. During the same period, Indian markets have shown sluggish growth, with the NIFTY50 trading around 19,500, down from it's all-time high of 20,222.
*What's Your Trading Strategy in the Current Market Scenario?*
Share your trading strategy in the comments below. Stay tuned for more market updates as we navigate the impact of US bond yield on Indian markets.
For more market insights and analysis, subscribe to our channel and hit the notification bell. Keep watching for the latest updates on the Indian financial landscape.
But what exactly is US bond yield, and how does it influence Indian markets? In this video, we'll break it down for you. Don't forget to like, share, and subscribe!
*Key Points Discussed in the Video:*
- Understanding US bond yield and its influence on Indian markets.
- The reasons behind the rise in US bond yields.
- How the rise in US bond yield affects foreign investment in Indian equities.
- Recent data on FIIs' activities in the Indian equity market.
- The NIFTY50's performance amidst this market scenario.
00:43: *What is Bond Yield?*
Bond yield, simply put, represents the return an investor receives for lending money to a borrower, often referred to as the interest rate. Bonds are a form of loans issued by governments, companies, and organisations to raise capital. The US bond market, the largest in the world, accounts for approximately 40% of global debt.
01:03: *Why is the US Bond Yield Rising?*
The US bond yield is on the rise due to the Federal Reserve's aggressive rate hikes since March 2022. Borrowing rates in the US are at a 22-year high, with more rate hikes expected to combat inflation, as per the latest statements from US Fed officials. Additionally, rising inflation, which reached 3.7% in August, prompts investors to demand higher bond yields to offset the eroding purchasing power. Consequently, the 10-year US treasury yield has surged to around 4.7% in October 2023 from 1.5% in January 2022.
01:52: *How Does US Bond Yield Impact Indian Equity Markets?*
Compared to equity investments, bonds are considered a safer option, offering risk-free returns. When US bond yields rise, US assets become more attractive to investors seeking higher returns. Consequently, foreign institutional investors (FIIs) withdraw capital from emerging markets like India and invest in US bonds, resulting in reduced foreign investment in Indian equities, putting downward pressure on stock prices. This trend is evident as FIIs have been net sellers in Indian equity markets over the last three months.
In August, FIIs witnessed a net outflow of ₹20,620 crore, which increased to ₹26,692 crore in September. In October, FIIs sold ₹6,458 crore worth of Indian equities. During the same period, Indian markets have shown sluggish growth, with the NIFTY50 trading around 19,500, down from it's all-time high of 20,222.
*What's Your Trading Strategy in the Current Market Scenario?*
Share your trading strategy in the comments below. Stay tuned for more market updates as we navigate the impact of US bond yield on Indian markets.
For more market insights and analysis, subscribe to our channel and hit the notification bell. Keep watching for the latest updates on the Indian financial landscape.
9 ماه پیش
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