The yield on India’s 10-year government security (G-Sec) climbed to about 6.67%, reversing the decline seen in the previous session, as a sharp surge in global oil prices and higher US Treasury yields triggered selling pressure. Brent crude crossed $100 per barrel after Iran sank two Iraqi oil tankers, heightening concerns over imported inflation and rupee depreciation in India, which is heavily dependent on energy imports. At the same time, the 10-year US Treasury yield approached 4.25%, adding external pressure on India’s long-term rates and prompting investors to trade cautiously.
The Reserve Bank of India intervened in the secondary market, purchasing government bonds to help curb the rise in yields, while long-term investors bought 53 billion rupees ($574 million) of government securities on Wednesday. Nevertheless, traders remain cautious about further volatility as energy prices stay elevated and global interest rates continue to trend higher. The rupee has hovered near record lows, underscoring the market’s ongoing sensitivity to oil shocks and geopolitical tensions.
