The yield on India’s 10-year government security hovered around 6.8%, stabilizing after touching a three-month low, as investors awaited the outcome of a ₹320 billion bond auction and tracked geopolitical developments in the Middle East. Market participants expect yields to remain range-bound until the auction results offer clearer direction.
Softer crude prices continued to weigh on yields, with Brent trading below $80 per barrel amid expectations of higher supply following the resumption of tanker traffic through the Strait of Hormuz. Sentiment was also supported by sustained foreign demand for Indian debt. Overseas investors have purchased more than $2.2 billion in local bonds over the past 10 trading sessions, following Reserve Bank of India measures announced on June 5 to encourage dollar inflows.
Recent foreign buying has been heavily focused on the 6.68% 2040 and 7.24% 2055 government securities, with the latter featuring in the latest debt sale.
