U.S. 10‑year Treasury yields hit a 19‑year high of 5.13% on Wednesday, sparking a sell‑off that dragged the Nifty 50 below its September 16 low of 23,116 for the first time since the start of the month.
Bond yields climbed to 5.4% on the 30‑year tenor, the highest since 2004, tightening discount rates and pulling investors toward higher‑yielding U.S. assets at the expense of emerging‑market equities.
Crude prices, which had slipped below $100 a barrel earlier in the week, rebounded to $106 following unverified reports linking the Iran‑U.S. conflict to a broader supply crunch, lifting energy‑heavy banks and oil‑related shares.
The U.S. dollar strengthened past 101, the strongest level in two months, weakening the rupee and pressuring metal stocks which fell up to 3% amid lower commodity prices.
Banking and insurance names accounted for the bulk of the decline; the Nifty Bank index fell 1,100 points after the IRDAI draft on distribution norms, with Axis Bank, IndusInd Bank, and IDFC First Bank all slipping around 5%.
Looking ahead, the market will digest the upcoming quarterly earnings of major banks on October 3, while the RBI’s policy stance remains unchanged, leaving traders to weigh the impact of global risk‑off sentiment on Indian equities.