FX.co ★ India 10Y Yield Extend Gains

The yield on India’s 10-year government security (G-Sec) climbed to about 6.7%, marking a third straight session of gains, as surging crude oil prices and prolonged geopolitical tensions triggered selling in the bond market. Oil prices rose sharply after US President Donald Trump indicated that the standoff with Iran could persist for several more weeks, heightening fears of imported inflation. The pressure on bonds was further exacerbated by a weaker Indian rupee and continued foreign portfolio outflows, both of which dampened demand for domestic debt. The rise in yields was partially contained by the Reserve Bank of India’s active intervention through stepped-up bond purchases aimed at stabilizing market conditions. Looking ahead, traders expect the benchmark yield to trade in a 6.62%–6.72% range in the near term, with crude prices and geopolitical developments likely to remain the key drivers.