Indian equities rally as US bond yields ease, snapping week-long decline

Indian stock markets ended a seven-day losing streak on Tuesday, buoyed by a sharp reversal in US bond yields that lifted sentiment across emerging markets. The BSE Sensex rose 628 points while the broader NSE Nifty index gained 154 points, signalling renewed buying interest after a period of sustained selling pressure.

The rally was primarily driven by easing US Treasury yields, which had been a significant headwind for equity valuations across Asia. Lower yields typically reduce the appeal of dollar-denominated fixed-income assets and support equity multiples, particularly in emerging markets sensitive to foreign capital flows.

However, investor caution remained evident as several macroeconomic risks continued to cloud the outlook. Elevated crude oil prices and escalating geopolitical tensions posed ongoing challenges for Indian equities, given the country's reliance on oil imports and exposure to global political developments. Analysts cautioned that while the current bounce provided relief, sustained recovery would depend on these external pressures easing further.

The recovery underscores the continued sensitivity of Indian markets to global financial conditions, particularly US monetary policy developments. Market participants were closely monitoring how US Treasury dynamics would evolve in coming sessions, while keeping a watchful eye on energy prices and geopolitical developments that could influence sentiment.