The yield on India’s 10-year government security (G-Sec) hovered around 6.8%, extending its decline to a two-month low as the drop in crude oil prices eased concerns about inflation and India’s external balances. Brent crude fell 5% for a second consecutive session—bringing its cumulative decline over four sessions to roughly 15%—after details emerged of an interim US–Iran peace agreement that would allow Iran to resume oil exports and extend a ceasefire announced in April by another 60 days.
The downward move in yields was further supported by robust foreign demand for Indian debt, with overseas investors purchasing more than $2 billion worth of domestic bonds over the last eight sessions, following the RBI’s June 5 measures aimed at boosting capital inflows. However, the decline in yields was capped by profit-taking after the recent rally and by caution ahead of the Federal Reserve’s upcoming policy decision, as investors await guidance from Chair Kevin Warsh on the US interest-rate outlook for 2026.
