Emerging equity markets strategist Adrian Mowat believes that the US 10-year yield can hit 2.5 percent over next 12 months. He said that the high US yields may not be negative for the Indian market.

He said, "I don't see any conceptual reason why the US bond yields shouldn't be 2.5 percent within the next 12 months. I don't think it is a particular headwind for India. India will be benefitting from the fact that we have a better global outlook. The fact that bond yields are moving to what will still historically be a very low level if we are talking about 2.5 percent should not be an impairment for economic activity."

He expects to see strong economic growth in countries like the US and the UK.

"We are very likely to see some of the strongest year-on-year growth in major economies such as the United States and the UK in the second half of this year. I think the pace of vaccination rollout continues to accelerate the efficacy. So the story of the second half is very strong economic data and higher discount rates. The irony of the rising bond yields reflects a relatively bullish story which is better economic growth, might help emerging markets like Korea, Taiwan and China," he said.

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(Edited by : Priyanka Rathi)