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The two key equity benchmarks, Sensex and Nifty, on Wednesday, extended their losing streak as indices crumbled under heavy selling pressure. The S&P BSE Sensex closed at 65,226, down 286 points. On the other hand, the NSE Nifty50 shut shop at 19,436, falling 93 points. The two indices hit intraday lows of 64,879 and 19,334, respectively. Notably, the indices recouped some of the losses during the latter part of the day. The market capitalisation of all listed firms on the BSE decreased by Rs 2.49 lakh crore to Rs 316.72 lakh crore.

According to experts, Weak global cues with continued FII selling, a stronger dollar, and rising US treasury yields contributed to bearish sentiment in the Indian stock market. Additionally, Global equities are concerned about prolonged higher interest rates. 

Breaking the 19,500 mark, analysts predict a bearish trend, with potential support at 19,330 and the possibility of slipping to 19,200, as per a Moneycontrol report. As per experts, the short-term trend of the Nifty remains negative. On the weekly options front, hurdles are expected at 19,500-19,700, with support at 19,400-19,200. Bank Nifty also saw a decline, falling below 44,000, with potential support at 43,800–43,600 and resistance at 44,400–44,500.

The slump in US Treasuries has caused a sell-off in emerging market debt, leading to a one-year high yield of 8.93 per cent on bonds in the Bloomberg EM Aggregate Sovereign Index, Bloomberg reported. This yield surpassed the earnings yield of 8.63 per cent on stocks in the MSCI Emerging Markets Index, marking an unusual reversal of the typical relationship between bond and stock yields.

Historically, equities offered a higher rate to compensate for their additional risk, but this anomaly has occurred only during times of extreme stress, such as the global financial crisis in 2008 and the Covid-driven rout of 2020. The risk to US equities, low-rated emerging-market credits, and global equities stems from the ongoing selloff in US bonds. While the anomaly typically lasts only a few days, its recurrence raises concerns for investors in developing-market sovereign debt.