Bombay Stock Exchange IMAGE.
The BSE Sensex, India's premier stock market index, has given a return of 5 percent over the last one month. This rally has come on the back of the decision of the finance ministers of eurozone (countries that use the euro as their currency) deciding to give a loan of 100 billion to weak Spanish banks on 10 June. But the euphoria generated by the rescue now seems to be fading.
strongRising bond yields
The bond yield on 10-year Spanish government bonds on 8 June 2012, a couple of days before the rescue was announced, was at 6.22 percent. Since then the yield has risen to 6.95 percent. Bond yield is essentially the return an investor can hope to earn from a bond every year, if he holds on to the bond until its maturity. A rising bond yield means that investors perceive the bonds to be risky and hence demand a higher return from them.
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