Market news today, 23 October 2026: Yes Bank defies court on AT1 coupons as bond yields hit 7.44%

The 10-year government bond yield rose to 7.44%, its highest level since March 2023.

The yield has risen 69 basis points over the last 10 weeks, driven by inflation fears as Brent crude oil prices approach $110 a barrel. The RBI is also set to sell bonds worth Rs 30,000 crore.

Higher yields increase the government's borrowing cost, where interest is 40% of revenue receipts this fiscal. For debt funds, this marks a third month of outflows as rising rates pressure existing bond portfolios. The fiscal deficit target of 4.1% depends on oil prices not forcing a steep hike in fuel subsidies.

Yes Bank is preparing to seek a review of the Supreme Court ruling and has indicated it will not pay the AT1 bond coupon due on October 18.

The bank cites contractual discretion in the bond documentation, arguing the issue can only be considered once the Rs 8,415 crore of written-off bonds are reinstated on its balance sheet. Bondholders are demanding payment of the 9% coupon and all coupons skipped since 2020.

The stance tests the enforceability of AT1 terms and shifts resolution to regulators and courts. For holders of the Rs 1.02 lakh crore of AT1 bonds outstanding in the banking system, it signals that high coupons come with payment risk even when a bank is a going concern. Yes Bank's core equity could fall to 10% if past coupons are paid.

Monthly systematic investment plan inflows reached a record Rs 32,490 crore in September.

About 10.06 crore SIP accounts contributed, with around 63 lakh new SIPs registered. The figure is 11% higher than September 2025 and follows equity fund inflows of Rs 38,306 crore, led by small-cap funds attracting a record Rs 9,038 crore.

Retail participation remains resilient despite a 5.1% drop in mutual fund industry assets, driven by debt outflows and mark-to-market losses. The steady flow provides a cushion for equity markets, but concentrated inflows into small-caps increase sectoral vulnerability if sentiment reverses.

Ujjivan Small Finance Bank reported a 200% year-on-year rise in quarterly net profit to a record Rs 365 crore.

Asset quality improved, with gross NPA falling to 2.10% from 2.45% a year earlier and net NPA at 0.31%. The provision coverage ratio remained stable at around 85%.

The earnings momentum supports a return on assets over 2% for FY27. For investors in small finance banks, it shows robust growth in micro-mortgages and MSME loans can coexist with stable credit costs, though the sector remains sensitive to any macroeconomic slowdown affecting its core borrowers.

Open interest in Nifty futures rose 4.6%, with the maximum pain point for the 27 October expiry at 22,900.

The put-call ratio for the expiry is 0.70, with the largest call open interest at 23,000 and the largest put open interest at 22,000. The Nifty closed at 22,811.

Options positioning suggests a range of 22,411 to 23,070 into expiry. With FIIs holding just 9.5% of their index futures positions long, the market relies on retail and HNI longs, who hold 84%. A break below the put wall at 22,000 could trigger accelerated selling.

Net inflows into Indian gold ETFs rose to Rs 44.5 billion in September, the highest in seven months.

Nearly 3 tonnes were added to holdings, taking cumulative holdings to 124 tonnes. Inflows continued into October, with an estimated Rs 17.22 billion in the first half.

The inflows come despite a 7% fall in domestic gold prices during September, which caused total gold ETF AUM to decline 2.5% month-on-month to Rs 1,863 billion. The shift into ETFs reflects a hedge against inflation and currency risks, but the asset class remains a small 2.25% of overall mutual fund AUM.