Why Indian stocks are falling: CA Sarthak Ahuja explains US bond yield impact on markets
Indian equities have faced renewed pressure as rising US Treasury yields, elevated crude oil prices and foreign investor selling weigh on market sentiment. CA Sarthak Ahuja has highlighted how higher US bond yields could influence global capital flows and the relative attractiveness of Indian equities.
- Oct 1, 2026,
- Updated Oct 1, 2026 2:19 PM IST
Indian equities have come under pressure in recent months, with rising US bond yields, elevated crude oil prices and foreign investor selling weighing on sentiment. CA Sarthak Ahuja, in a recent social media post, explained how higher US Treasury yields could influence global capital flows and Indian equities.
Ahuja compared a hypothetical ₹1 crore investment made two years ago across major global indices. According to his comparison, the investment in the Nifty 50 would be worth around ₹88 lakh currently, compared with around ₹1.35 crore in the S&P 500, ₹1.30 crore in Germany's DAX and ₹1.50 crore in Japan's Nikkei. He said the corresponding value in Taiwan would be above ₹2 crore.
Ahuja also pointed out that the comparison does not take into account rupee depreciation. For Indian investors holding overseas assets, a weaker rupee can increase the rupee value of foreign-currency investments when converted back into Indian currency.
How US bond yields affect markets
Ahuja's central argument is that rising US Treasury yields can make dollar-denominated assets more attractive to global investors.
Explaining the relationship between bond prices and yields, he said that when investors sell existing US government bonds, their prices fall. Since the interest payment on the bond remains fixed, the yield rises as the market price declines.
He noted that the US 10-year Treasury yield was above 5.1%, while the 30-year Treasury yield had moved to around 5.4%.
According to Ahuja, such yields could encourage investors to move money towards US fixed-income assets, potentially reducing the attractiveness of riskier emerging-market assets.
Indian market under pressure
The pressure on Indian equities was particularly visible in September. The Nifty 50 ended the month at 22,620.45, down 6.1%, marking its steepest monthly decline since 2018. Elevated crude oil prices, rising global bond yields and foreign investor selling contributed to the weak sentiment.
Foreign portfolio investors withdrew ₹25,662 crore from Indian equities in the secondary market during September, ending a two-month buying streak. However, they invested ₹8,551 crore through the primary market. Domestic institutional investors provided support, investing ₹52,617 crore during the month.
The market capitalisation of NSE-listed companies stood at around ₹467 lakh crore at the end of September, compared with ₹469 lakh crore in June, although it remained nearly 14% above the ₹410 lakh crore recorded in March 2026.
IT stocks bear brunt
All sectoral indices ended September in the red, with the Nifty IT index falling nearly 12%. Bajaj Finserv and Infosys declined 14.3% and 12.3%, respectively.
Ahuja also cited rupee depreciation, limited frontier AI innovation, low research and development spending and concerns over employment generation as broader challenges for the Indian economy.
Markets will now track second-quarter earnings, crude prices, FPI flows, RBI policy, geopolitical developments, tariffs and festive-season demand for signs of improvement. Ahuja advised individuals to focus on job security and personal upskilling amid the uncertain environment.
Indian equities have come under pressure in recent months, with rising US bond yields, elevated crude oil prices and foreign investor selling weighing on sentiment. CA Sarthak Ahuja, in a recent social media post, explained how higher US Treasury yields could influence global capital flows and Indian equities.
Ahuja compared a hypothetical ₹1 crore investment made two years ago across major global indices. According to his comparison, the investment in the Nifty 50 would be worth around ₹88 lakh currently, compared with around ₹1.35 crore in the S&P 500, ₹1.30 crore in Germany's DAX and ₹1.50 crore in Japan's Nikkei. He said the corresponding value in Taiwan would be above ₹2 crore.
Ahuja also pointed out that the comparison does not take into account rupee depreciation. For Indian investors holding overseas assets, a weaker rupee can increase the rupee value of foreign-currency investments when converted back into Indian currency.
How US bond yields affect markets
Ahuja's central argument is that rising US Treasury yields can make dollar-denominated assets more attractive to global investors.
Explaining the relationship between bond prices and yields, he said that when investors sell existing US government bonds, their prices fall. Since the interest payment on the bond remains fixed, the yield rises as the market price declines.
He noted that the US 10-year Treasury yield was above 5.1%, while the 30-year Treasury yield had moved to around 5.4%.
According to Ahuja, such yields could encourage investors to move money towards US fixed-income assets, potentially reducing the attractiveness of riskier emerging-market assets.
Indian market under pressure
The pressure on Indian equities was particularly visible in September. The Nifty 50 ended the month at 22,620.45, down 6.1%, marking its steepest monthly decline since 2018. Elevated crude oil prices, rising global bond yields and foreign investor selling contributed to the weak sentiment.
Foreign portfolio investors withdrew ₹25,662 crore from Indian equities in the secondary market during September, ending a two-month buying streak. However, they invested ₹8,551 crore through the primary market. Domestic institutional investors provided support, investing ₹52,617 crore during the month.
The market capitalisation of NSE-listed companies stood at around ₹467 lakh crore at the end of September, compared with ₹469 lakh crore in June, although it remained nearly 14% above the ₹410 lakh crore recorded in March 2026.
IT stocks bear brunt
All sectoral indices ended September in the red, with the Nifty IT index falling nearly 12%. Bajaj Finserv and Infosys declined 14.3% and 12.3%, respectively.
Ahuja also cited rupee depreciation, limited frontier AI innovation, low research and development spending and concerns over employment generation as broader challenges for the Indian economy.
Markets will now track second-quarter earnings, crude prices, FPI flows, RBI policy, geopolitical developments, tariffs and festive-season demand for signs of improvement. Ahuja advised individuals to focus on job security and personal upskilling amid the uncertain environment.