New Delhi, Oct 19 : The market responds to economic headwinds more than geopolitical tensions. From that perspective, the sustained rise in US bond yields is becoming a major challenge for the US, and thereby for global markets, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The market had not positioned itself for the US 10-year bond yield at 4.95 per cent and, therefore, this unexpected spike in yields will take its toll on equity markets, he said. It is important to understand that the spike in bond yields is not due to monetary factors alone. The fiscal situation characterised by high deficit in the US is also contributing to the rise in yields via increased supply of bonds. So, this combination of fiscal and monetary factors pushing bond yields up will pose a major challenge to equity markets, he said. FPIs will continue to sell, impacting the markets. Financials, though fundamentally strong, are likely to face more selling pressure since the major part of FPI's AUM is in financials, particularly leading banks, he said. Long-term investors can capitalise on the decline in banking stocks triggered by FPI selling, through a calibrated accumulation strategy. This segment is doing well and the valuations are fair, even attractive. BSE Sensex is down 334 points at 65,542 points on Thursday. Wipro is down more than 3 per cent. /IANS