Benchmarks fall amid global jitters, IT sell-off, and US credit downgrade

2. Rising US Treasury Yields

In a further sign of investor unease, the yield on the benchmark 10-year US Treasury note rose to 4.52%, while the 30-year yield breached 5%—levels not seen since April. Rising yields increase borrowing costs and can weigh on equity valuations, especially for high-growth sectors such as technology.

3. Weak Global Market Cues

Global equity markets were under pressure. Asian indices, including Japan’s Nikkei 225, South Korea’s Kospi, China’s Shanghai Composite, and Hong Kong’s Hang Seng, all closed in the red.

European markets opened lower, reacting to mixed data from China and the US. US futures were weak, with S&P 500 futures down 1% and Dow futures off 0.7%, hinting at a subdued Wall Street open.

4. IT Stocks Under Pressure

The IT sector led the losses on Dalal Street, declining over 1 percent, as concerns mounted about the sector’s revenue exposure to the US market. Major IT heavyweights including Infosys, TCS, and Tech Mahindra saw sharp declines.

The IT sector contributes 11.11% to the Nifty 50’s total weightage, making its underperformance a significant drag on the broader index. Investors fear that any slowdown or policy uncertainty in the US could dampen IT sector earnings, especially with the macroeconomic outlook now clouded.

5. Market Volatility on the Rise

The India VIX surged 11 percent to 19.81, signaling a spike in market volatility and investor nervousness. A high VIX often precedes broader market swings and reflects uncertainty around short-term direction.