The Indian stock market faces mounting headwinds as a combination of surging oil prices and rising bond yields continues to weigh on investor sentiment.
The benchmark Nifty 50 has posted negative returns over the last two years, and expectations of a swift recovery are being tempered by persistent macroeconomic pressures.
Escalating geopolitical tensions in the Middle East, coupled with the reimposition of US sanctions, have driven crude prices higher.
This energy cost shock is directly impacting India’s trade balance and inflation outlook, creating a challenging environment for equity valuations.
Simultaneously, Indian government bonds are extending their recent slide, with yields rising as investors demand higher compensation for risk.
The pressure on domestic assets is further amplified by the strength of the US dollar and elevated US Treasury yields.