Stock markets across the globe have fallen recently due to rising bond yields. Let us understand the relation between bonds and equities and try to figure out whether this fall will continue or it is just an overreaction of slight increase in bond rates and markets will rally again. Nifty - Last 5 days chart Government bond yield - Last 5 days chart Bond yield and equities have inverse relation, in general which we can see in published charts. However, it is not absolute relation because equities can move up or down due to a lot of other factors also but recent fall was primarily due to concerns over increasing bond yields. If bond rates are high, it is very obvious that few investors will move to bonds from equity as it is safer option and your capital is protected. Stocks are risky by nature. You can lose your entire capital forget about dividend or capital appreciation. Whereas bonds are secured, in general and if it is government bond then of course it is backed by government ...
Simplification of finance for retail investors