<p>The bond-yield on the government's term securities is tanking globally, as more and more investors are trusting the government debt over the equity markets after the Federal Reserve's cut proved counter-productive for the investor sentiments.</p>.<p>After the Fed announced an out of turn rate cut of 50 basis points on Tuesday -- third time in the history -- the move set panic among the global investors about the gravity of the spread of the deadly coronavirus.</p>.<p>As a result, most investors scrambled towards the government debt, usually considered as a safer bet due to the sovereign guarantee. The situation was made worse after China reported an 80% drop in passenger car sales during February</p>.<p>As the investor started the parking their monies in the government securities, the yields on the 10-year US treasury yields (also called the world's benchmark bond) crashed to sub 1% for the first time in history. At the time of filing this story, the US 10-year bond yields stood at 0.976%.</p>.<p>Back home the 10-year bond yields tanked to a three and a half year low of 6.226%, as the investors made their flight towards safer assets. This is the lowest since November 22, 2016, when bond yields had closed 6.307%.</p>.<p>Bond yields usually fall in times of economic trouble when investors are aiming for the relative safety and high liquidity of developed countries' government debt. Bonds are also a traditional hedge to stock investments. As the stock market has been plummeting, bond prices have climbed higher.</p>.<p>Yields and bond prices move opposite to each other. If the price of a bond goes up because of high demand, its yield goes down. The recent bond rally, which has been triggered by global equity meltdown, pushed the 10-year Treasury yield to record lows.</p>.<p>In the intraday trade, Sensex had also crashed by 720 points as investors started dumping the stock, most of them parked their monies in government debt. However, the late afternoon buying by the investors helped pare losses to close half a percent down. </p>
<p>The bond-yield on the government's term securities is tanking globally, as more and more investors are trusting the government debt over the equity markets after the Federal Reserve's cut proved counter-productive for the investor sentiments.</p>.<p>After the Fed announced an out of turn rate cut of 50 basis points on Tuesday -- third time in the history -- the move set panic among the global investors about the gravity of the spread of the deadly coronavirus.</p>.<p>As a result, most investors scrambled towards the government debt, usually considered as a safer bet due to the sovereign guarantee. The situation was made worse after China reported an 80% drop in passenger car sales during February</p>.<p>As the investor started the parking their monies in the government securities, the yields on the 10-year US treasury yields (also called the world's benchmark bond) crashed to sub 1% for the first time in history. At the time of filing this story, the US 10-year bond yields stood at 0.976%.</p>.<p>Back home the 10-year bond yields tanked to a three and a half year low of 6.226%, as the investors made their flight towards safer assets. This is the lowest since November 22, 2016, when bond yields had closed 6.307%.</p>.<p>Bond yields usually fall in times of economic trouble when investors are aiming for the relative safety and high liquidity of developed countries' government debt. Bonds are also a traditional hedge to stock investments. As the stock market has been plummeting, bond prices have climbed higher.</p>.<p>Yields and bond prices move opposite to each other. If the price of a bond goes up because of high demand, its yield goes down. The recent bond rally, which has been triggered by global equity meltdown, pushed the 10-year Treasury yield to record lows.</p>.<p>In the intraday trade, Sensex had also crashed by 720 points as investors started dumping the stock, most of them parked their monies in government debt. However, the late afternoon buying by the investors helped pare losses to close half a percent down. </p>
