Chapters in Macro & Economy
Chapter 3 of 7 · 5 min read
Bond yields and the yield curve
Why the 10-year G-Sec is a market benchmark, and what a flat or inverted curve signals.
A bond's yield moves opposite to its price. The 10-year government security (G-Sec) yield is India's benchmark risk-free rate: it anchors loan rates and the discount rate for equity valuation.
The curve
Plotting yields across maturities gives the yield curve. Normally it slopes up. A flat or inverted curve (short yields at or above long) has historically signalled slowing growth or tight policy.
Why equity investors care
Rising yields raise the hurdle for equities and hurt long-duration, high-valuation stocks first. Foreign flows also respond to the gap between Indian and US yields.
Key takeaways
- Yield up means price down.
- The 10-year G-Sec is the benchmark for valuation comparison.
- Curve shape signals the growth and policy outlook.
Put it into practice
Open the live page on Market Intelligence and see this concept on real data.
Keep learning
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Education only, not investment advice. Updated 2026-10-09.