Indian equity markets came under renewed selling pressure on Thursday, reversing the gains recorded in the previous trading session. The benchmark indices weakened sharply as rising US Treasury yields increased concerns over global interest rates and prompted investors to reassess riskier assets.

The BSE Sensex dropped more than 500 points, moving around the 74,300 level, while the NSE Nifty 50 slipped below 23,250 during the session. The decline reflected broad-based caution among investors, with global market signals weighing on domestic sentiment.

A key trigger for the sell-off was the sharp rise in the 10-year US Treasury yield, which crossed the 5% threshold. Higher US bond yields can make dollar-denominated fixed-income assets more attractive, potentially reducing the appeal of emerging-market equities and other risk-sensitive investments.

The movement in US Treasury yields has become particularly important for global markets as investors monitor the outlook for US interest rates, inflation and economic growth. A sustained increase in benchmark US yields can also influence foreign portfolio investment flows into markets such as India.

The Indian market's decline came despite the positive momentum seen in the previous session. Investors appeared to use the latest global developments as a reason to book profits, particularly after recent market advances.

Selling pressure was visible across key segments of the market, although the intensity varied between sectors and individual stocks. Market participants remained cautious as they assessed the potential implications of higher global borrowing costs for corporate earnings, valuations and capital flows.

The rise in US yields also strengthened the broader debate over the direction of global monetary policy. If borrowing costs remain elevated for longer, investors could continue to favor relatively safer fixed-income instruments, while equity markets may experience periods of heightened volatility.

For Indian equities, the immediate focus remains on global bond yields, foreign institutional flows, currency movements and upcoming domestic economic and corporate developments. Analysts are also watching whether the Nifty can regain the 23,250 zone and whether the Sensex can stabilize after the sharp intraday decline.

The latest fall highlights the increasing influence of international financial conditions on Indian equities. With US Treasury yields remaining elevated, domestic investors may continue to closely track developments in the US bond market alongside India's economic fundamentals.