Shares of India's state-run banks have fallen sharply as Treasury yields climbed to a two-year high, driven by renewed concerns over Iran-related tensions.
The move reflects a broader shift in risk appetite, with investors seeking higher returns amid heightened uncertainty.
The recent political developments in India, including significant opposition wins in state elections, have added to the uncertainty.
The 10-year Treasury yield has surged past 4.6%, marking its highest level since early 2024.
This upward trend is being fueled by a combination of geopolitical volatility and a reevaluation of the 'risk-free' status of U.S. government debt.
The yield curve has steepened, with the 2-year yield rising in tandem, signaling a shift in expectations for monetary policy and inflation.
The recent political developments in India, including significant opposition wins in state elections, have added to the uncertainty.