Emerging risks to test Indian equities’ mettle
SummaryIn general, emerging market equities are seen as more vulnerable to higher interest rates. So, foreign investors may seek refuge in relatively safer assets such as the US dollar.
A confluence of unfavourable factors has emerged lately that could hurt the appetite for riskier assets such as equities. Cases in point include rising US bond yields and a strengthening US dollar index, which reduce the attractiveness of stocks, amid worries of a global recession. For the first time since October 2007, the US 10-year bond yield soared to touch 4.5% on Monday.